A flourishingregion

Regional Economic Strategy for the East Midlands 2006-2020

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Enterprise and business support

Innovation

Economic inclusion

Economic renewal

Cohesive communities

Land and development

Transport and logistics

Energy and resources

Environmental protection

PICTURED:

the east coastat Sutton-on-Sea,Lincolnshire.

Creating aninnovation cultureand community inthe East Midlandswill accelerate anddrive productivity

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PICTURED: CORNERHOUSE, NOTTINGHAM.

Section one Foreword 7

Section two Summary 8

Section three Introduction and context 12

Section four The East Midlands 22

Section five Strategic vision: a flourishing region 30

Section six Introduction to structural themes 42

Section seven Raising productivity 48

Section eight Ensuring sustainability 86

Section nine Achieving equality 118

Section ten Challenges for the sub-regions 140

Section eleven Integration and delivery 150

Annexes Annex A: The Regional Index of Sustainable Economic Wellbeing 176

Annex B: Development principles 178

Annex C: Under-represented groups 180

Annex D: Links to other regional strategies 182

Glossary 186

References 187

Index 191

Further information 193

Contents

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Section one

PICTURED: ROCKINGHAM CASTLE, NORTHAMPTONSHIRE.

Section one

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ForewordDR BRYAN JACKSON OBE, CHAIRMAN,EAST MIDLANDS DEVELOPMENT AGENCY.

I am delighted, on behalf of emda - the East Midlands Development Agency, and jointly with the East Midlands Regional Assembly,to introduce this, the third Regional Economic Strategy for the East Midlands. It follows the publication of ‘Prosperity though People’in 1999 and ‘Destination 2010’ in 2003, which set the ambition for the East Midlands to become a ‘Top 20’ region in Europe. We aredelighted that, when last measured in 2005, the region had climbed from 35th to 28th place in the European rankings. Much hasbeen achieved but there is still much that remains to be done.

We retain our ambition to become a leading region in Europe by 2010 but it is now time to reflect on what is working and what is not, toassess and reassess the challenges we face for the future and to renew and reinvigorate our collective commitment to achieving success.

‘A Flourishing Region’ sets out our aspirations and vision for the region over the next decade or so to 2020. Its production followsthe most extensive consultation process we have ever undertaken and is informed by the most comprehensive evidence baseassembled on the East Midlands, its economy and its strengths and its challenges. Over the last year, emda attended over 100events, reaching around 1,400 regional stakeholders and partners, held roadshows in 11 public venues across the region, includingcity centres and tourist attractions and for the first time, we invited members of the public to join the consultation through anadvertising campaign on billboards and public transport and a dedicated website which received over 20,000 hits. In total wereceived 495 substantive written contributions.

The support and input of partners, business and individuals across the region has been immense and I am extremely grateful for allthose that participated. I am particularly pleased that Cllr David Parsons, Chairman of the East Midlands Regional Assembly, hasjoined us in introducing this new Regional Economic Strategy. The Regional Assembly has been a key partner in its development.

It is clear that for the East Midlands to thrive and to compete with the best in Europe and the world, we must build on our distinctivestrengths to ensure that our economic growth creates a prosperous and sustainable region, where everyone has the opportunity toachieve their potential.

We have been clear throughout, this is an economic strategy setting out realistic and achievable plans to address economicpriorities, but it is not about economic growth at any cost. That aspiration is reflected in our new vision for the region - that by 2020the East Midlands will be characterised by growing and innovative businesses, skilled people in good jobs, participating in healthy,inclusive communities and living in thriving and attractive places - in short it will be a flourishing region with high levels of economicwellbeing and a quality of life amongst the best in the world.

This is the region's strategy, not emda's, although we will play our full role in realising its aspirations. To make the step changerequired to drive the East Midlands’ economy forward the strategy must be owned and delivered by all those businesses,stakeholders and individuals that can make that difference. The East Midlands is becoming an increasingly mature and self-assuredregion, clear about the joint efforts needed to progress its shared ambitions and prepared to take some of the difficult decisionsneeded to bring them to fruition. To that end, on behalf of emda and the East Midlands Regional Assembly, we are delighted towelcome this third Regional Economic Strategy and we look forward to working closely with business, partners, stakeholders andindividuals over the coming years to ensure the East Midlands becomes a truly flourishing region.

Dr Bryan Jackson OBE Cllr David ParsonsChairman, East Midlands Development Agency Chairman, East Midlands Regional Assembly

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The East Midlands aims to become a flourishing region. Through this, our third Regional Economic Strategy, the East Midlands setsout in detail how it will mobilise its resources and engage every person, business and organisation to maximise the opportunitiesavailable to us.

The East Midlands is a large, active and diverse region, with 4.3 million people and over 260,000 businesses. We benefit from ourgeographical location at the heart of the UK with strong links to London and the south east and to the northern regions. From thePeak District National Park through the dynamic cities of Nottingham, Derby and Leicester to the Lincolnshire coast and thecounties of Rutland and Northamptonshire, the region has plenty to offer. But it also faces a wide range of challenges - both in urbanand rural areas.

On some measures, the economy of the region is doing well. We have high levels of employment and relatively high levels ofeconomic growth. However, the region still performs less well than the UK average on productivity and we face a particularchallenge in raising skill levels so we are better able to enhance our economic performance. Our success is not reflected acrossall parts of the region, nor in all sections of society. It will be important to address the underperforming areas of the region, as wellas those parts with the greatest opportunity. Striking the right balance between these two objectives will not be easy - but all actionsin support of the RES should consider how they will help meet our overall vision for the region.

The challenges

The Strategy identifies some major global economic drivers which we must address together, including the emergence of Asianeconomies, rising energy costs, the impact of climate change, and pressures on our communities and localities arising from theunevenness, not just the pace, of change.

Addressing these challenges, along with the specific challenges of the region, will require action by all stakeholders at regional,sub-regional and local level. We face particular issues in the East Midlands in relation to globalisation, as a result of our traditionalstrengths in manufacturing. Demographic changes (including the ageing population and migration) are particularly significant inthe region, alongside our lower than average skill levels. We also face challenging health issues and will need to capitalise on shiftsin energy production from our traditional coal burning strengths.

In order to increase productivity so we can match and then exceed UK levels, we need to focus our actions on the key economic drivers:

� Skills: addressing the relatively high proportion of people with no qualifications and enabling more people who are in work to develop higher level skills;

� Innovation: helping to increase investment in research and development by businesses, particularly small and mediumsized enterprises - and ensuring far more good ideas are translated into new or improved products or services;

� Enterprise: improving rates of company formation and survival, and creating a culture of enterprise which beginsat school;

� Investment: improving levels of investment in the service sector, so the region is equipped to maximise the opportunitiesfrom this fast-growing part of the economy.

Section two

Summary

Section two

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The region

The economic core of the East Midlands is the Three Cities sub-area (Nottingham, Derby, Leicester and their surrounding areas).

Almost half the population and 45% of the region's businesses are in this area. But within this core there are also extreme pockets

of deprivation. Northampton will become increasingly significant as that part of the region undergoes rapid growth and Lincoln

plays an important role in driving the economy of Lincolnshire. Together, these urban areas, where most people live and work, are

central to improving economic performance overall. The Strategy supports the collective ambitions of the cities as the main drivers

of regional economic growth and activity.

As the third most rural region in England, the Strategy must also recognise and address the diverse range of issues facing our rural

and coastal areas, from relatively affluent urban fringes to remote areas with lower levels of economic productivity. There needs to

be integrated action across both urban and rural areas.

The vision

In response to the complex and inter-related challenges, and the varying nature of the region's geography, we propose a unique

vision which enables us to pursue an agenda of sustainable economic growth, while also ensuring we are not exacerbating these

challenges for future generations.

Our vision is that by 2020, the East Midlands will be a flourishing region - with growing and innovative businesses, skilled people

in good quality jobs, participating in healthy, inclusive communities and living in thriving and attractive places. The vision will be

measured using the ground-breaking ‘Regional Index of Sustainable Economic Wellbeing’, which we have developed to allow

progress towards our twin aims of sustainable economic growth and economic wellbeing to be monitored.

PICTURED: ATTENBOROUGH NATURE RESERVE, NOTTINGHAM.

The priorities

This vision is underpinned by three main themes:

� Raising productivity: enabling our people and businesses to become more competitive and innovative;

� Ensuring sustainability: investing in and protecting our natural resources, environment and other assets such as

infrastructure;

� Achieving equality: helping all people to realise their full potential and work effectively together to enrich our lives

and our communities.

This is the region's economic strategy, and as such 'Raising Productivity' is the primary theme, but in order to achieve our vision of

a flourishing region, we must also address the other two themes.

Within the three main themes, we have identified 10 strategic priorities:

Section two

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STRATEGIC PRIORITIES AIM

Employment, learningand skills

Enterprise andbusiness support

Innovation

Transport andlogistics

Energy and resources

Environmental

protection

Land and development

Cohesive communities

Economic renewal

Economic inclusion

To move more people into better jobs in growing businesses.

To become a region of highly productive, globally competitivebusinesses.

To develop a dynamic region founded upon innovative andknowledge focused businesses competing successfully in aglobal economy.

To improve the quality of regional infrastructure to enable betterconnectivity within and outside the region.

To transform the way we use resources and use and generateenergy to ensure a sustainable economy, a high qualityenvironment and lessen the impact on climate change.

To protect and enhance the region's environment throughsustainable economic growth.

To ensure that the quality and supply of development land, andbalance between competing land uses, contributes towardssustainable growth of the regional economy.

To increase life chances for all leading to stronger and morecohesive communities, a dynamic society and a strongereconomy.

To ensure all people and communities have the opportunity tocreate new and sustainable economic futures.

To help overcome the barriers, or market failures, that preventpeople from participating fully in the regional and local economy.

Taken together, action against all of these will help deliver the vision of economic growth that creates a flourishing region. The keypoints under each of these strategic priorities are set out below:

� In order to raise productivity, we must also raise the skill levels of people already in employment, so action to increasethe proportion of the adult workforce gaining new skills will be a priority. This will help to get more people into better jobs ingrowing and competitive businesses.

� To help the East Midlands become a region of highly productive, globally competitive and innovative businesses, we willtarget provision of business support and raise the profile of enterprise, supporting new business creation andovercoming barriers to growth of small businesses, including developing social enterprises.

� To help the region compete successfully in the global economy, we will ensure businesses are helped to become moreinnovative through deployment of new technologies and processes, and ensuring that our universities play their role bycontinuing to develop leading edge research and development. The following four sectors have been identified as havingpotential to make the greatest contribution to the East Midlands’ economy and would benefit from intervention: transportequipment, construction, food and drink and healthcare.

� Recognising the important role of transport and connectivity in raising productivity, we will target and prioritiseinvestment, improve accessibility, tackle travel demand to reduce congestion and minimise harmful environmental impactsand realise the economic benefits of airports.

� We need to transform the way we use energy and resources to make the transition to a low carbon economy and willpromote the development and deployment of renewable energy technologies and support businesses to exploit newopportunities and to secure financial savings from more efficient use of resources.

� In order to provide for our economic growth to be sustainable, we will seek to protect the environment and promotesustainable design best practice, along with improving damaged industrial environments and promoting cleanerproduction processes.

� Recognising the importance of good quality employment land as a key input to our sustainable economic growth, wewill work with the framework set through the Regional Spatial Strategy and with planning authorities to improve the rate ofre-use of land, and ensure provision of appropriate infrastructure - including transport, cultural and community infrastructureto allow the benefits of development to be shared.

� In support of equality and diversity, we will encourage community engagement in neighbourhood renewal and developcapacity of local groups to improve community cohesion, thereby removing some of the disincentives to investment,and hence improve economic and employment opportunities, in some of our more challenging areas.

� To share the benefits of economic growth and a rising quality of life, disadvantaged areas need assistance in economicrenewal, for example by providing responsive business support and reducing the impact of crime.

� To improve the opportunities of disadvantaged groups, we will pursue economic inclusion addressing barriers to labourmarket participation and improving skills and enterprise chances.

Delivering the Strategy

Throughout the Strategy we have identified priority actions, delivery of which will together help us achieve our shared vision. TheStrategy identifies key partners for each of these actions. emda will work with those partners to produce a RES Implementation Plan.The Plan will map partner contributions to delivery of the RES and enable any gaps in delivery to be identified and addressed.

Our progress in achieving the vision will be assessed against the performance management framework which has the ground-breaking Regional Index of Sustainable Economic Wellbeing at its core. This enables us to measure the financial costs and benefitsto society of some of the things that are important to our wider aims - such as pollution, volunteering, crime and a good qualitynatural environment. In support of this Index, emda will also monitor progress in delivering the RES against the two key measuresof productivity and employment rate. In addition, each of the 10 Strategic Priorities is supported by one or more specific measures.

The Strategy has provided a shared understanding of the region, its challenges and opportunities, and a high degree of consensusover the priorities and activities we need to focus on to improve the economic performance of the region, while at the same timeimproving the quality of life of all those who live and work here.

Section two

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What is the Regional Economic Strategy?

The Regional Economic Strategy (RES) sets the framework for ensuring the long term sustainable economic growth of the region.

The fundamental purpose of the RES is to improve economic performance and enhance the region's competitiveness. It will do this

by addressing the market failures that prevent or limit sustainable economic development, and supporting regeneration and

business growth. We are quite clear, it is businesses that create and generate wealth and they will make the difference to the

economic success of the East Midlands. The Strategy is the product of a major consultation exercise in which the views of several

thousand stakeholders and businesses across the region have been sought. It is owned by the region and will be delivered only

through the combined efforts of business and business leaders, democratically elected representatives, community leaders and

those local and regional bodies and agencies tasked by Government to deliver quality and inclusive public services.

This Strategy will ensure better strategic focus and co-ordination of activity in the region. It also provides for regional

opportunities to be fully exploited, and is intended to secure effective joint working, with common and accepted goals and

priorities for regional development.

Regional Development Agencies (RDAs) are tasked with producing Regional

Economic Strategies, reviewed every three years to ensure they are relevant to the

changing needs of each region’s economy. The East Midlands’ first RES, ‘Prosperity

Through People’, was published in 1999. It set a target for the East Midlands to

become a Top 20 region in Europe by 2010. The RES was revised in 2003 as

'Destination 2010'. Our progress against the index of economic and environmental

measures that underpin this vision was first measured in 2003, when the region was

at 35th position. The region is currently in 28th place. This demonstrates substantial

progress in meeting the target and the region can be proud of its performance.

This, our third Regional Economic Strategy, looks to build on this considerable success by providing an economic blueprint to take the

region towards 2020. It sets out a clear vision to create a flourishing region, characterised by sustainable growth, economic wellbeing

and quality of life. This is an economic strategy; its core purpose is to secure increasing economic growth, productivity and overall

prosperity - but not at any cost. Ensuring sustainability and achieving equality are also critical elements of a successful region.

Evidence and integration

The Government has given RDAs a clear remit to produce RESs which are underpinned by a credible and robust evidence base.

This challenge has been met by producing the most comprehensive evidence base to date. This contains two main outputs - a

Quantitative Data Report ‘The East Midlands in 2006’, and a compendium of policy papers from a range of leading independent

academics. The Quantitative Data Report has been produced using a wide range of official data sets and forecasts. This

comprehensive portrait of the region includes sections on: demography, business structure, labour market, economic inclusion, the

environment and transport. Subjects covered in our series of policy ‘think pieces’ include: the rural economy; innovation; regional

Section three

The RES sets theframework forensuring the longterm sustainableeconomic growthof the region.

Introduction andcontext

Section three

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PICTURED: CONKERS VISITOR CENTRE, LEICESTERSHIRE.

competitiveness; enterprise; and globalisation. The evidence base has been rigorously assessed and peer reviewed by a team of

regional researchers and independent academics to ensure it provides an accurate portrait of the region, which can effectively

identify the key challenges facing our economy. The complete evidence base is on the Intelligence East Midlands website and is

available to download from: www.emintelligence.com

The Strategy is fully integrated with other key regional and inter-regional strategies

and plans, in particular, the Regional Spatial, Transport and Housing Strategies.

Strong links are also made to regional priorities for innovation; sustainable food and

farming; environmental enhancement and protection; energy and waste

management; freight; education; community safety and cohesion; culture and health.

The East Midlands’ economy does not operate in isolation. This Strategy supports the

aims and objectives of inter-regional cooperation such as those set out in the

Midlands and Northern Ways, the Milton Keynes/South Midlands (MKSM) Growth

Area and the Oxford to Cambridge Arc.

Prioritising regional action

This Strategy is prioritised to ensure that we maximise our resources to achieve effective sustainable growth. It identifies areas

where intervention is necessary to improve performance and where that intervention is likely to be most effective. An ‘Intervention

Framework’, shown in chart 1 below, has been used to assess the actions and priorities.

This Framework identifies the evidence

to justify an action in each policy area

and considers the extent to which

‘market failure’ or other failure has

occurred - or where a significant

opportunity exists. The model presumes

that public sector intervention only

applies where there are challenges or

problems that would otherwise not be

resolved or addressed, or where there

are untapped opportunities. We have

produced a separate technical paper

which details the evidence, rationale

and options considered for each priority

action in the Strategy. This is available to

download from www.emintelligence.com

The RES has also been reviewed

through a comprehensive Strategic

Environmental Assessment (SEA). This

ensures that social and environmental

considerations are integrated into the

preparation and adoption of strategies

and programmes.

Section three

The Strategy is fullyintegrated with otherkey regional andinter-regionalstrategies and plans.

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CHART 1 : RES Intervention Framework

Delivering the RES

The RES is the region's economic strategy and extends beyond issues and priorities under the direct influence of emda, the East

Midlands RDA. Our shared regional vision of a flourishing region can therefore only be achieved if this Strategy is delivered through

effective partnership. A very broad range of strategic bodies and delivery agencies across all sectors and in all parts of the region will

have key roles to play in implementing the Strategy. Therefore, the publication of the Strategy will be followed by the production of a

more detailed implementation plan identifying the leadership roles, responsibilities and commitments of key stakeholders to the delivery

of the RES and, where possible, the resources attached to the delivery of actions. Annex D of this Strategy provides more detail on how

the RES links to other regional strategies within the framework of the Integrated Regional Strategy. Section 11d identifies the lead and

other delivery partners for each priority action in the Strategy.

Leadership and partnership will be key to the success of this Strategy. It will only be through the common effort of business, political and

civic leaders, along with the businesses and communities of the East Midlands that our vision of a vibrant, economically successful and

socially inclusive region will be achieved.

In particular, the East Midlands Regional Assembly, the Government Office for the East Midlands and emda have specific responsibilities

for overseeing and leading the coordination of actions in support of this Strategy.

Key partnerships such as the region's universities, InnEm - the Science and Innovation Council for the East Midlands; the esp - the

Employment, Skills and Productivity Partnership; the joint Regional Housing, Transport and Planning Board; the Learning and Skills

Councils (LSCs) and the Programme Monitoring Committees for European funding in the region will all have an important role to play.

It is essential that business is at the heart of this Strategy and representative bodies

including EMBF - the East Midlands Business Forum (which includes representatives of

Chambers of Commerce, the Confederation of British Industry and the Institute of

Directors), our Business Champions, a range of sector fora, as well as individual

businesses will have a clear contribution to make and will be critical to the success of

the region's objectives. It will also be essential that the voluntary and community

sectors, particularly through regional organisations such as Voice East Midlands and

Engage East Midlands, play their full role.

Importantly, this Strategy recognises the vital role that local government has in

supporting the delivery of economic growth and creating the right local conditions for

that growth. Engaging with democratically elected representatives and local authority

groupings, including the emerging city-region structures in the East Midlands will be a

key element of the delivery of the RES.

Finally, the East Midlands is a geographically large and spatially diverse region. A ‘one size fits all’ approach will not deliver the most

effective solutions across and within the region. Delivery will differ according to the specific needs of particular localities, both in rural

and urban areas. Sub-regional Strategic Partnerships and Sub-regional Investment Plans will support the delivery of this Strategy in order

to reflect that diversity and maximise the impact of expenditure at the local level. These Investment Plans will be guided by the evidence

base that underpins the regional economic priorities and will be developed in support of them. Local Strategic Partnerships and Local

Area Agreements (particularly the 4th Block on Economic and Enterprise Development) and Local Enterprise Growth Initiatives (LEGI)

where applicable will be extremely important for delivery at the local level.

Throughout this Strategy some specific locations have been highlighted, essentially where initiatives are largely spatial in nature

(transport or housing for example) or where particular local circumstances are unique within the region (coastal area regeneration for

example). In all other instances priorities should be assumed to potentially cover the entire region.

Section three

A very broad rangeof strategic bodiesand deliveryagencies across allsectors and in allparts of the regionwill have key roles toplay in implementingthe Strategy.

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Section three

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PICTURED: PEEPUL CENTRE, LEICESTER AND INTERNATIONAL STUDENTS FROM THE UNIVERSITY OF NOTTINGHAM.

Diversity

Realising the potential of the diversity of the East Midlands will be essential to achieving our vision of a flourishing region. All parts

of the region - urban and rural areas - must play, and be enabled to play, their full part in achieving sustainable economic growth.

Across the region, our diverse population presents opportunities for businesses to expand their market presence. In addition,

people from excluded groups make up a significant proportion of the region's population and evidence shows that many

experience barriers to social and economic inclusion. If exclusion continues to inhibit the prospects of these groups, economic

opportunities will not be maximised and social cohesion threatened.

The business case is, therefore, clear; diverse communities represent new and often untapped market opportunities and increasing

the economic participation rates of all groups reduces costs to society and enhances regional economic performance. In addition,

for the region to continue to adapt to and benefit from the challenges of the global economy we need to ensure that the skills and

contribution of all sections of our society are mobilised.

Consequently, diversity is central to the success of this Strategy, underpinning all elements of its delivery. If we are to realise our

vision of a flourishing region we must ensure that we unlock the economic opportunity of all East Midlanders and ensure we strive

towards equality of access to opportunity regardless of race, gender, disability, age, sexual orientation or faith.

The wider context

The East Midlands operates within the national, European and international context. It must, therefore, reflect and be responsive to

the economic policy and funding strategies of the European Union and to the dynamics of international trade and the global

economy. This Strategy recognises the region's place in the wider world and demonstrates an understanding of the threats and

opportunities presented by globalisation and the potential impact of low cost economies on our wealth and competitiveness.1

As part of this outward looking perspective, it is important to recognise and understand the region's role within the enlarged

European Union. The EU provides the context in which a range of national and regional policies are developed. The RES supports

the higher level objectives of the Lisbon and Gothenburg European Strategies* and

makes a positive contribution to their achievement through the alignment of strategic

priorities and investment streams within the region.

The East Midlands currently (2000-2006) benefits from around £420 million from the

European Structural Funds. In order to support and drive the effectiveness of any

future European resources coming into the region the RES demonstrates a high

degree of complementarity with the European Commission's Community Strategic

Guidelines 2007-13 (which will guide the Structural Funds post 2006). Given that the UK's strategy for the Structural Funds will be

derived from these Guidelines, the RES will form the natural bridge between regional economic priorities and the strategy and

programming documents for the Structural Funds. It is therefore anticipated that the RES will provide the guiding economic

framework for the Funds post 2006. In addition, it is important for the region to maximise non-Structural Fund receipts including, for

example, the 7th Framework Programme for Research and Development. The RES also aims to position the region to respond to

the proposed reforms of the Common Agricultural Policy (CAP) and the new Rural Development Regulation, which will continue to

impact on the region's rural and farming communities.

National and inter-regional context

Nationally, the strategic priorities of Government departments are set out in their Public Service Agreement targets and in their longterm plans. Section 11e details the PSA target alignment with RES priority actions. Where relevant, this Strategy links to these anddemonstrates the contribution it will make to achieving them. This will help ensure cohesion of public sector delivery, maximiseresource impact and help shape and inform national policy in the region. We are committed to working with Government to achievethis. We also demonstrate how the region will contribute to, and benefit from, major national events such as the 2012 Olympic andParalympic Games in London.

Section three

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The East Midlandsoperates within thenational, European andinternational context.

* In March 2000, at the Spring European Council held in Lisbon, European Heads of Government and State committed themselves to a ten-year strategy to become“the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater socialinclusion” by 2010. At the Spring European Council in March 2005, EU Heads of Government re-launched the Lisbon strategy with a new focus on jobs and growth,whilst paying due regard to the Sustainable Development principles agreed at the Gothenburg summit.

Section three

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PICTURED:

Clockwise from left:Derby City Centre;Lincoln Castle;NorthamptonGuildhall; NottinghamTrams; Buxton,Derbyshire.

The East Midlands borders five other English regions. We make clear in this Strategy the necessity for joint working across ourregional boundaries, including with existing and proposed inter-regional strategies, such as ‘Smart Growth: The Midlands Way’(SGMW) and ‘The Northern Way’. These two initiatives are at different stages of development, but share similarities in their focuson cross-regional working to achieve shared economic, regeneration and productivity objectives. Whilst the Northern Way areafocuses on the three northern regions, (of North East, North West and Yorkshire and Humber) it also includes parts of Derbyshireand Nottinghamshire within the Sheffield city-region. The SGMW initiative is Midlands focused (East and West), and led by the RDAswith the Regional Assemblies, Government Offices, Department for Communities and Local Government (DCLG), and otherpartners supporting the work. SGMW considers the city-region concept, and the ways in which that approach will help improvegrowth across the Midlands.

The Strategy also supports, and seeks to maximise the contribution to the region from the Milton Keynes South Midlands (MKSM)growth agenda. MKSM is one of the growth areas being developed to help meet the housing and economic challenges facing thesouth-east region, but holds the potential to help drive economic growth in the south of the East Midlands. Similarly, the Cambridge- Stansted - Peterborough growth area will also have implications for parts of the region with the Peterborough Housing Market Areastretching into southern Lincolnshire. The emerging 'Key Growth Points' initiative could also provide further economic and growthopportunities for other locations in the region. This strategy complements proposals for growth point status for the Three Cities sub-area and parts of Lincolnshire.

Regional context

The RES operates within the context ofthe Integrated Regional Strategy,produced by the East Midlands RegionalAssembly; it also aligns clearly with theRegional Spatial Strategy (RSS) (underreview at the time of writing). Annex Dsets out the linkages with these and otherregional strategies. In turn, thesestrategies should, as far as possible, beconsistent with the challenges, prioritiesand actions in the RES.

Sub-regional context

Where appropriate, sub-regional spatialneeds and opportunities are identified inthe RES to enable solutions and prioritiesto be targeted where they are likely tohave the greatest impact. Existingadministrative boundaries can beconstraining in describing the differingcharacteristics of parts of the region; theregion is therefore described on the basisof five sub-areas as proposed for therevised Regional Spatial Strategy:2

� Peak,

� Three Cities,

� Eastern,

� Northern,

� Southern.

Section 10 describes the sub-areas inmore detail.

Section three

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MAP 1: East Midlands Spatial Sub-Areas

Urban and rural context

Spatially, the East Midlands can be described as a mosaic of different settlement types. The core city of Nottingham, and the cities of

Leicester and Derby (the Three Cities sub-area) along with Northampton are central to driving the region's economy. Northampton is the

largest urban settlement in the MKSM growth area and will become increasingly significant in the region in population and economic

activity terms. The city of Lincoln and the towns of Mansfield and Chesterfield play important sub-regional roles for economic activity

and growth in the Eastern and Northern sub-areas. In summary, our cities and major towns are the areas where the majority of the

population live and work, raising their performance will be key to raising our economic performance overall.

The region's towns and cities vary greatly, covering a range of different spatial scales and physical characteristics. From small market

towns to the largest cities, these urban areas serve fundamental roles as economic drivers, and locations for a wide range of important

functions which contribute to the way our region and its communities work. The relationship between the settlements at these different

spatial scales is important, with the region's main urban areas being the focus for major investment and development, but the smaller

centres also performing an important role, and well suited to smaller scale development. At the Three Cities level, opportunities arising

through closer joint working and collaboration on key economic and spatial issues are

being explored to help realise the collective ambitions of the cities as the main drivers of

regional economic growth and activity.

It is important that all our urban areas maintain their competitiveness and attractiveness

as places to live, work, and invest. Clearly, decisions over development location will need

to take account of a range of different issues, including land supply, environmental

characteristics and constraints, and infrastructure capacity. Our urban areas have

important strengths and assets which underpin opportunities to drive economic growth.

These include; quality public spaces and public realm, locations at key points and hubs on transport networks; development land for

new housing and employment opportunities to improve existing communities, and develop new ones. However, alongside these assets

and opportunities, many urban areas also contain areas of deprivation, where regeneration and inclusion issues remain fundamental to

provide balanced growth which benefits all of the region's communities.

The East Midlands is the third most rural of England's regions in terms of the percentage of its population that live in rural areas. In

England that proportion is 19.4%; by comparison, the East Midlands’ figure is 29.5%, representing some 1.2 million people.3

The rural areas are very diverse, ranging from highly accessible and relatively affluent 'urban fringe' to areas which are substantially more

remote where population density, economic productivity and access to services are much lower. The land varies from rolling farmland

in much of the south and east of the region to the moors and dales of the Peak District, from the former coalfield areas in the north to

the Lincolnshire Fens and Coast. The nature of agriculture varies throughout the region too, with hill farming being prominent in the

Derbyshire Peak District, dairy and beef production in the south and west of the region, and predominantly arable production in the east.

The coastline is predominantly rural, with nationally and internationally recognised wildlife and natural habitats, interspersed with the

traditional seaside resorts of Skegness, Mablethorpe and smaller tourist and retirement centres. These towns and smaller coastal

communities contain a significant ageing population and a concentration of socio-economic disadvantage on a variety of measures, as

shown by the Index of Multiple Deprivation.4 Lincolnshire's coast is therefore one of the most economically disadvantaged parts of the

region. Much of the local employment involves relatively low income and skill levels. There is also a seasonal influence and much

temporary and casual employment in tourism and agriculture, with an increasing presence of migrant workers engaged in agriculture

and horticulture in the Fenland areas adjacent to the Wash and extending into the neighbouring East of England region.

However, a common feature throughout the region is the relatively high number of market towns compared to other regions and the

important ‘stepping stone’ that they provide as a service centre for their outlying rural areas and as a feeder to the region's larger towns

and cities. There is very real interdependence between the urban and rural areas of the East Midlands.

The Urban Action Plan provides a regional strategic framework for urban areas, based around core common themes which include

public realm, land supply, and skills and business development. The Regional Rural Delivery Framework (RRDF) and the emerging Rural

Action Plan provide a similar strategic framework for economic, community and environmental activity in rural areas.

Section three

Spatially, theEast Midlands canbe described as amosaic of differentsettlement types.

20

Section three

21

PICTURED: GONALSTON FARM IN NOTTINGHAMSHIRE AND NOTTINGHAM CITY CENTRE.

22

Key characteristics

Geography

The East Midlands is England's fourth largest region, covering an area of 15,607km2. It consists of six counties - Derbyshire,Leicestershire, Lincolnshire, Nottinghamshire, Northamptonshire, and Rutland. The region's main population centres are the citiesof Derby, Nottingham, Leicester and Lincoln, and the towns of Northampton and Mansfield.5

The East Midlands is geographically diverse. The Regional Spatial Strategy identifies five distinct sub-areas which provide a usefulway of describing the region, each with different characteristics and challenges:

� Peak sub-area - the National Park and surrounding areas in the west of the region, which are largely rural in character;

� Three Cities sub-area - comprising the cities of Derby, Leicester and Nottingham and surrounding towns and districts,the cities acting as major administrative and cultural centres, containing a significant proportion of the population;

Section four

The East Midlands

Gross value added (GVA) 2004 £65.8bn £1033.3bn

Gross value added per head index, 2004 (UK=100) 91.5 100.0

Population, 2004 (millions) 4.3m 59.8m

Total geographical area (square km) 15,607 242,515

Employment rate, 2004 75.4% 74.2%

Unemployment rate, 2004 4.3% 4.9%

Percentage of economically active adults with no qualifications, 2003 12.2% 10.8%

Percentage of economically active adults with a Level 4 + 25.0% 28.6%

(first degree or above), 2003

Total value of exports as a percentage of GVA, 2003 21.6% 19.2%

Workplace based annual earnings, 2005 £17,713 £18,961

CHART 2 : The East Midlands in figures East Midlands United Kingdom

Source: Office for National Statistics (ONS) Crown Copyright, 2006, for full explanation of regional indicators see the ‘RES Evidence Base: The East Midlands in2006’, www.emintelligence.com

� Eastern sub-area - incorporating Lincolnshire and Rutland, which with the exception of the city of Lincoln and the towns

of Boston and Grantham, is predominantly rural in character and includes some remote and significantly deprived areas,

particularly on the coast;

� Northern sub-area - North Derbyshire and North Nottinghamshire have been adversely affected by economic

restructuring, especially from colliery closures and the decline of the textiles sector;

� Southern sub-area - Northamptonshire, with generally high employment and economic activity rates and pockets of

deprivation, such as Corby, and with close functional relationships with adjacent regions (the South East, the West Midlands

and the East of England).

Demographics

The region has a population of 4.3 million, which is 7% of the UK total. Population density in the region varies from around 70 per

square kilometre in parts of Lincolnshire to more than 50 times that number in Leicester and Nottingham.6

Population forecasts suggest that the number of people of current state pensionable age and older will be one and a half times

larger than the population under 16 by 2028. The East Midlands will be particularly

affected by this trend and is expected to experience the most significant growth in the

pensionable age group of all of the English regions. This age group is projected to

increase by some 63% between 2003 and 2028, particularly in rural areas. Older

people need to be supported to remain economically active and barriers to learning

and employment will need to be addressed. Although they have increased markedly

in recent years, the economic activity and employment rates of those over 50 still

remain significantly below the average for the working age population. In addition, it

is well-documented that the onset of disability increases with age, and that over 33%

of people aged between 50 and retirement age are disabled. This will particularly

affect the rural parts of the East Midlands.7 Many of these rural communities are

experiencing a marked growth in the number of older people moving in whilst

younger people are migrating to urban centres.

According to the 2001 Census, about 9% of the East Midlands’ population classify themselves as coming from an ethnic minority

background. In Leicester, ethnic minorities make up 39% of the population. Ethnic minority groups generally have lower levels of

employment. For example, in 2004, the employment rate for those of Pakistani or Bangladeshi origin in the East Midlands was only

43.8% of the working age population, over 30 percentage points below the regional average.8 Although there have been significant

improvements in the employment rates of ethnic minority groups in recent years and there is significant variation between different

groups,9 this gap in employment rates has been consistent over the past 20 years.

Labour market

The labour market in the East Midlands is relatively stable but is characterised by the persistence of a ‘low pay low skill

equilibrium’, where high employment rates are to an extent maintained by a concentration of low pay low skill jobs. The East

Midlands is the only region of the five Northern and Midlands regions10 with an above average employment rate (75.4% compared

to 74.2% for the UK). The unemployment rate is relatively low (4.3% compared to 4.9% for the UK).11 Despite this, average

earnings are relatively low and there are a large number of people with no qualifications. In particular, the East Midlands

significantly lags the national average in higher level qualifications, and has one of the lowest proportions of its workforce

educated to degree level in the UK. This gap in skills performance is reflected in earnings levels, with individuals working in the

East Midlands earning 6.6% less than the national average, only £17,713 compared to £18,961 in the UK.12 This is a consequence

of the region's industrial and business structure, which results in a comparatively weak demand for skills due to a large number

of businesses competing principally on the basis of cost.13

An examination of the rural and urban labour markets shows marked differences. The average employment rate for all East

Midlands’ rural local authorities is 78.2%, almost three percentage points above the regional average. In contrast the average

Section four

Population forecastssuggest that the numberof people of currentstate pensionable ageand older will be oneand a half times largerthan the populationunder 16 by 2028.

23

employment rate for urban local authorities is only 72%, 3.4 percentage points below the regional average.14 These aggregate

figures do mask significant local variations. A number of rural districts display below average employment rates. This is indicative

of a dependence on weak local labour markets, which suffer from relative isolation and poor transport links. Average earnings for

people living in many rural districts are considerably above the figure for people working in rural areas. This suggests that many

better paid workers live in rural districts and commute to urban areas to work, whilst much of the employment located in rural

districts is lower paid.

Patterns of deprivation

The East Midlands has a diverse economic and social mix, ranging from relatively prosperous city-dwellers and commuters to

pockets of serious urban and rural deprivation. An examination of data from England's Indices of Multiple Deprivation 2004 (IMD)

shows that the East Midlands' more deprived communities are located within our urban centres (Derby, Leicester, Lincoln,

Nottingham and Northampton), the former coalfield areas of North Derbyshire and North Nottinghamshire and the Lincolnshire

coastline and its rural hinterland. On this measure, Nottingham City is the most deprived local authority in the East Midlands and

South Northamptonshire the least.15

Environment

The region's environment is an important asset and protecting and investing in itmakes economic sense. Environmentally sensitive farming and forestry practicessuch as agri-environment schemes, organic production and sustainable woodlandmanagement support approximately 4,300 land-based jobs in the East Midlands andare key elements of the region's broader environmental economy. The East Midlandsfaces some significant challenges. It has, for example, almost 500 Sites of SpecialScientific Interest (SSSIs); however, these cover a smaller proportion of the total landarea than the national average. Biodiversity has declined faster in the East Midlandsthan elsewhere in the UK, in part due to the significant amount of high quality,intensively farmed land. The majority of wildlife indicators in the East Midlands, suchas numbers of farmland birds, scarce plants and mammals, have all shown seriousdecline over the last 25 years.16

Global economic drivers of change

The East Midlands, with a GVA of around £66 billion17 is a significant economy, but in the context of the world economy it is small.Businesses in the East Midlands are part of a highly competitive global marketplace the dynamics of which will continue to exert aprofound influence on business models, supply chain development and patterns of trade. This section describes four globaleconomic drivers of change.

1. Global economic growth

Global economic growth is expected to ease back from the 30 year high recorded in 2004, but is still expected to be robust.Estimates suggest that the global economy could grow by as much as 40% by 2015. However, current performance across theglobe remains far from even:

� There have been a number of years of below trend growth in the eurozone and the big three eurozone economies - Germany,France and Italy - have all experienced recessions during the last three years. Growth in the eurozone is expected to remainrelatively low through the next year.

� The UK has outperformed its major European competitors in recent years and is expected to continue to do so. The finalgrowth figure for 2005 is expected to be around 1.7-1.8%, down from over 3% in 2004.18

Section four

Biodiversity hasdeclined faster in theEast Midlands thanelsewhere in the UK, inpart due to thesignificant amount ofhigh quality, intensivelyfarmed land.

24

� The United States remains the most rapidly growing of the major industrialised nations. In 2005 the US economy enjoyedabove trend growth, despite a series of interest rate increases.

There have been two key features of the global economy in the last few years:

� Oil prices increased dramatically during 2004 and remained above $50 per barrel throughout 2005, touching $70 per

barrel in August 2005. High oil prices directly impact on energy-intensive production sectors such as utilities, transport and

agriculture. This also has an indirect effect, through reduced levels of real income, on sectors producing discretionary

consumer items such as electronics and travel.

� The emergence of Asian economies: China and India are increasingly drivers of the global economy - the size of the

Chinese economy is expected to have overtaken that of the UK in 2005. These economies are likely to continue growing

rapidly during the next two or three decades as they become fully integrated into the global economy. This growth presents

both threats and opportunities to the East Midlands. The key threat is the on-going transfer of economic activity to these

locations. The benefits will include lower prices, redeployment of labour into more productive activity, higher profits for East

Midlands’ businesses, along with reverse linkages such as Chinese and Indian investment 'on shore' and increased exports.

2. The impact of climate change

We are clear that the scale of the impact of climate change is such that international efforts are needed to address the problem.

However, as a region we must continue to be ambitious in our aims to reduce the causes of climate change and take local action

to mitigate the consequences. Business in the East Midlands will need to be prepared to compete in a ‘low carbon economy’ with

the associated taxation and legislative changes this may bring about, and an economy in which security of energy supply may

become increasingly important. As a region we will need to pay increasing attention to resource and energy efficiency, including

exploiting opportunities for alternative sources and new technology development. The effects of climate change itself may have far-

reaching implications including, for example, heightened flood risks and the associated impacts on agricultural land, housing

developments and related planning and insurance constraints.

3. Digital technologies

Worldwide telecommunications networks and their underpinning technologies will continue to advance rapidly. As mobile phone

technology, broadband, wireless and satellite services become cheaper many more people can expect to be connected wherever

they are, profoundly changing how people live, work, and spend their leisure time. In this globally connected economy it will be

essential that people and businesses throughout the region - in both rural and urban areas - have equal access to the latest

technologies and have the skills to exploit the opportunities they bring.

4. Strong and cohesive communities

A flourishing region is one which recognises the need to enhance personal and community wellbeing alongside economicwellbeing. A successful economy is both reliant upon strong and cohesive communities and has a critical role to play in creatingthe right conditions and opportunities for everyone to realise their life chances.19 Factors such as equality of opportunity andexperiences of education, health, employment, housing and the quality of the physical environment all impact on the cohesivenessof a local area.

Economic outlook

Below we outline the key forecasts for the East Midlands economy for the ten year period 2004-2014.20 The performance of the EastMidlands economy will be driven by national and international macro economic issues and local, regional and national policyactions. These policy actions will aim to improve economic growth above the baseline figures presented here.

� Regional economic growth is forecast to increase 2.6% per year* in the period 2004-2014, which is an absolute increase of£18 billion to the region's GVA. This is in line with the UK average. There are short-term risks to this forecast - for example, onthe upside, growth may quicken in the United States and on the downside, there is the possibility of long-term oil price rises.

Section four

25

* It should be noted that these baseline forecasts are used to help assess the region's probable trajectory of development. They are primarily based on (historic) officialdata sources and as such will not reflect the impacts of planned local developments that could have consequences for employment and output at that level.

� Employment growth in the East Midlands is likely to be 0.4% per year in the period 2004-2014, which is, again, in line withthe UK average. This represents a net absolute increase of around 63,000 jobs by 2014.

� When assumptions about delivery of the RES are included in the model,* the forecast increases to economic growth of 2.8%per year for the period 2004-14. This is 0.2 percentage points per annum above the baseline forecast. This means that, by2014, an additional £14.1 billion of economic output would have been generated for the region. Full details of this approachare represented in the Economy and Productivity Section of the RES Evidence Base.

� Sectoral employment growth in the East Midlands is likely to be most rapid in the business services sector (estimated growthof just over 30%) and the communications sector (estimated growth of 28%). Significant employment growth is alsoexpected in the health, other services (which includes cultural and sporting activities), construction and hotels and catering sectors.

� We expect to see continued reductions in employment concentrated in the production and primary sectors of the economy(such as textiles and clothing and agriculture, forestry and fishing) but employment losses are also expected for the publicadministration and defence sectors.

Factors influencing regional productivity

Two critical factors will determine the continued growth of the regional economy. These are employment rates (the number of people

in work) and productivity levels (the value generated by each hour worked). For this reason measures of Gross Value Added

(GVA)21 and Employment Rates underpin the way in which we will measure the region's progress over the coming years.

However, the East Midlands continues to demonstrate a ‘productivity gap’. In 2003 GVA per hour worked in the East Midlands was

96.9% of the UK average. This is an improvement on the position in 1999, but still lags behind the UK's leading regions.

Understanding the factors that drive increases in productivity will help us to better understand potential options and the limitations

in policies and actions aimed at improving productivity. These factors are summarised below:-

Investment

We need more investment, public and private, in the region. In 2002 investment by UK owned businesses was equivalent to 5.6%

of GVA in the East Midlands, a fall from 8.5% in 1998. This fall mirrors what has happened nationally, but levels of investment by

UK owned businesses in the East Midlands have been below the UK average during this period. There has also been a fall in

investment by foreign owned businesses in the region, from 1.5% of GVA in 1998 to 1.2% of GVA in 2002. This has remained

relatively stable at national level during this period.22

There are distinct differences in investment levels between sectors in the region. Levels of investment by manufacturing businesses

are above average, although this is to be expected given the relatively large scale of the manufacturing base in the region.

However, levels of investment in the service sector, expected to be the fastest growing part of the economy in the next decade, are

relatively low.

Innovation

Innovation is the successful exploitation of new ideas and is key to developing new and better products and services. There is a

mixed picture when it comes to assessing innovation performance in the East Midlands. Levels of investment in innovation are

relatively high, but unevenly distributed by source. Business Enterprise Research and Development (BERD) is relatively high in the

East Midlands and accounts for 1.8% of GVA, compared to a national average of 1.4%. Expenditure on R&D from Government and

higher education in the region is below average. Government R&D accounts for only 0.1% of GVA and is half the national average.

Expenditure on R&D by the Higher Education Sector is only 0.4% of GVA compared to 0.5% UK average.23

The ten Higher Education Institutions24 in the region are key to the knowledge networks of the region and are sizeable employers intheir own right. There is scope for universities in the region to boost the level of investment in R&D in the higher education sector

Section four

26

*This ‘policy on’ projection is a broad attempt to capture the impact of achieving the key policy objective of closing the productivity gap that exists between the EastMidlands and the UK, and the full implementation of the MKSM Growth Area Plan.

through greater research collaboration of the kind exemplified by the inter-institutional research networks promoted by ScottishHigher Education Institutions.25

Despite the relatively high levels of expenditure on R&D in the East Midlands, the data also clearly shows that this is not alwaystranslated into successful market outcomes. Only 4% of turnover can be attributed to new or improved products by East Midlands’businesses, compared to the UK average of 8%. This highlights a clear need to improve the effective commercialisation of R&D inthe region alongside increasing the number of businesses who engage in this activity, especially small businesses.26

Skills

We need people with the right skills to take advantage of future employment opportunities. There is still a clear gap in workforceskills between the East Midlands and the UK. A significant issue for regional labour productivity is the higher proportion ofindividuals with no qualifications, suggesting serious basic skills needs, alongside a persistent lag in higher level qualifications.This impacts on the other drivers of productivity, as individuals with low skills are less able to respond to the increasing demandsof a changing economy whilst a business with a low skilled workforce is less able to innovate and adopt new technologies andprocesses to be responsive to market demand.

Enterprise

We need more businesses to start up and grow. Data on enterprise activity in the region is largely positive. It shows that TotalEntrepreneurial Activity27 (TEA) has increased in recent years and is now above the UK average.28 Female Entrepreneurship hasalso seen very positive growth in recent years and Female TEA currently stands at 4.3%, exceeding the national average of 3.9%.The number of VAT registrations per 10,000 population has also increased since 1999 but remains below the UK average. The EastMidlands has improved its position in recent years but more still needs to be done if we are to achieve the levels of entrepreneurshipof the leading regions of the world.

Competition

Competition drives productivity but is largely influenced by national factors, such as economic stability. One way of assessing thescale of competition in a region is to examine the international exposure of businesses. The data shows that the East Midlands ismore exposed to international competition than elsewhere. In 2003 exports from the East Midlands were equivalent to 21.6% ofGVA, above the average of 19.2% for the UK,29 which is partly a reflection of the relatively large industrial base of the region.

Challenges for the region

To succeed in its economic ambitions the region must be adaptive to changes in the external environment and work collectively toaddress a number of key challenges which will impact on the region in the medium to long term:

� Globalisation: the East Midlands is part of an increasingly globalised economy and subject to ever increasing amountsof external competition. To succeed the East Midlands must compete, not with the other regions of the United Kingdom, butglobally. In the face of rapid growth in countries such as China and India (which are increasingly competing not just on costbut also on expertise and will continue to move up the value-added chain) and from the knowledge intensive economies ofNorth America, Europe and Japan, East Midlands’ businesses will need to become more innovative, more skilled and morecreative to stay ahead.

� The productivity gap: given the region's high employment rate and low unemployment rate there is relatively little scopefor increasing wealth through increased labour market participation, with the exception of some of the more deprived partsof the region. The challenge is to increase wealth by making the region and its workers more productive.

� Diversifying and strengthening the economic base: the overall economic structure of the region is a keydeterminant of its adaptive capability - that is, the ability of an economy to cope with challenges from outside at the sametime as developing sustainable new paths of development from within.30 Development of the service sector and of high valueadded manufacturing activities, and the creation and growth of smaller and innovative businesses is essential if the regionis to remain competitive.31

Section four

27

� Enhancing learning, skills and employability: in order to address the challenges of the low skill low pay equilibriumwe need to improve the skills and productivity of the region's workforce, develop a knowledge intensive economy and retainour high levels of employment. People with higher skills will be more productive, add more value and create more wealth forthe economy.32

� Responding to demographic change: demographic change, and in particular the changing age structure of the

population, will present challenges particularly for health provision, tourism and leisure choices as well as taxation, pensions

and financial services. The supply of labour and skills in many areas will also be constrained.

� Migration: both inward and outward migration will continue to figure in labour markets and employment patterns and

trends. For example, the inward migration of retirees is prevalent in rural areas of the region such as Lincolnshire and High

Peak, attracted from other regions by our high quality of life and affordability. There are also implications for economic

mobility and access to employment and qualifications.

� Changing work patterns: linked to technological advances and other issues changing work patterns will continue

with the increased participation of women in the labour market, more flexible and non-traditional working and career

progression and implications particularly for child and dependant care and leisure provision. Increased homeworking can

have significant environmental benefits through reduced car use.

� Reducing intra-regional disparities: there remain significant disparities in terms of employment, earnings and wealth

within the East Midlands. Reducing these disparities will not only increase the welfare of a significant proportion of the

residents of the East Midlands, it will also contribute to closing the gap in economic performance between the East Midlands

and the UK's leading regions.

� Realising the full potential of urban areas: as centres of a significant proportion of economic and social activity,

our cities and towns are key drivers of regional economic performance. Cities offer ready access to large numbers of

consumers of goods and services, and inputs to the production process and provide a range of employment, leisure and

cultural activities, creative knowledge and innovation. Many urban areas in our region are not achieving their full potential

and all continue to contain deprived areas characterised by economic and social exclusion.

� Stimulating the renewal of rural communities: there is a close interdependency between urban and rural areas

which goes beyond commuting to work and urban facilities. The rural areas and the businesses they support are making a

substantial contribution to the regional economy, but they face significant problems and barriers that need to be overcome

if their full potential is to be realised. In rural areas, local employment, enterprise, community and cultural as well as business

infrastructure must be fostered in order to ensure that villages and market towns are sustainable communities.

� Improving Public Health: Public Health issues will have a growing impact on the regional economy particularly with

regard to the health of workers, and their families. Widespread communicable disease, for example, could also have a

significant impact on business continuity and productivity. The proportion of residents with a limiting long term illness is

higher than the England average, at 18.4% compared to 17.9%. Chronic ill health is particularly common in disadvantaged

areas, for example in the former coalfields and the Lincolnshire coast. The East Midlands has the highest rate of adult

obesity of all English regions, with 24.8% of adult residents classed as obese compared to an England average of 21.4%.

This is particularly high for women, at 26.3%. The region remains below the England average in the proportion of adults who

have participated in a sport or physical activity at least once in the four weeks prior to interview, at 41.9% compared to 43.2%

in England. Improved access to health care and preventative services is important, as is access to clean air, unpolluted

water, healthy food, open spaces, and warm housing. Access to sporting and recreational facilities, more cycle and

pedestrian-friendly routes and the availability of open space may have a positive impact on health. Good building design

and safe roads, and cycling and walking routes are also key.

� Building on our cultural, sporting and tourism strengths: Although the East Midlands is already a successful

tourism destination, there is huge potential for expansion. The cultural and tourism assets - including the arts, creative

industries, and heritage - are a large and growing part of the region's economic offer. Future success depends on a skilled,

creative workforce that can rise to the challenge of offering distinctive products and services within and beyond the region.

Section four

28

Sporting facilities and leisure services provide an environment in which communities and groups can interact, individuals can

improve health, fitness, and awareness of the arts, culture and heritage and so contribute to the fabric of a flourishing region.

� Meeting our energy challenge: There is growing recognition that our current use of energy is unsustainable and that

fossil fuels are now beginning to be more constrained and therefore expensive. Within 15 years, the UK will be importing

three quarters of its primary energy demand. Furthermore, the challenge of global climate change means that we will need

to make a profound change in the way we use energy and materials. Some of these changes will need to be made at the

regional, sub-regional and local level, recognising the importance of local markets, supplies and resources to protect and

enhance our economic wellbeing. Moving towards a resource efficient low carbon economy represents a huge cultural

challenge for consumers and producers alike. At the same time, it offers a significant economic opportunity for the region in

terms of productivity savings, new market opportunities and increased economic resilience, as well as potentially ensuring

greater control over energy supply.

Section four

29

PICTURED: AWARD-WINNING TOURIST ATTRACTION, WHITE POST FARM CENTRE, NOTTINGHAMSHIRE.

30

Section fiveStrategic vision

“By 2020, theEast Midlands will be aflourishing region.Increasingly prosperousand productive, we willenjoy levels of economicwellbeing and a quality oflife higher than theEuropean average andcomparable with thebest in the world”

PICTURED:

Kidz R Us Nursery,Leicester.

31

A flourishing region

32

Section five

Strategic vision -a flourishing region

“By 2020, the East Midlands will be a flourishing region. Increasinglyprosperous and productive, we will enjoy levels of sustainable economicwell-being and a quality of life higher than the European average andcomparable with the best in the world.”

Since 1999 the East Midlands has shared a vision to become a ‘Top 20 region in Europe by 2010’. Our progress against the indexof economic and environmental measures that support this vision was first measured in 2003, when the region was in 35th position.The region is currently in 28th place. This demonstrates substantial progress in meeting the target and the region is rightly proudof its performance. However, as the ‘Destination 2010 Achievements’ document published in May 2005 pointed out, whilst theregion has been successful in many areas, there is still much more to be achieved in order to meet or exceed our ‘Top 20’ target,through increasing economic activity and improving the quality of jobs, helping the poorest parts of the region to grow andprotecting and improving the environment. We will continue to measure our progress against the Top 20 index up to 2010.

This Regional Economic Strategy, the third to be published since 1999, stretches the region's ambitions beyond 2010 and towards2020. We want the East Midlands to be a prosperous region, and one in which people want to live and work. To achieve this, weneed to be clear about the kind of economy we wish to work and invest in, the kind of jobs we aspire to for ourselves and our familiesand the kind of environment we want to live and spend our leisure time in.

For the East Midlands to thrive and to compete with the best in Europe and internationally we must build on our distinctivestrengths to ensure our economic growth creates a prosperous and sustainable region, where everyone has the opportunity toachieve their potential.

To achieve this, the East Midlands must become:

� productive - with an efficient workforce and high levels of innovation in both manufacturing and services, able to competeon a global basis. The region must achieve high levels of investment, enterprise and skills;

� a great place to live - with a good quality natural and built environment, with equal access to high quality services,cultural, leisure, sporting and civic opportunities, where people want to live and work;

� people friendly - characterised by a strong economy which provides opportunities for all and recognises the balancebetween work and life;

� resilient - where people and businesses are responsive and adaptive to change;

� informed - where people are educated, have skills appropriate and relevant to their work and have a strong sense ofachievement;

� capable - with high performing institutions and networks in the private, public and voluntary sectors which facilitatesustainable economic growth;

� healthy - where people enjoy good health and those suffering long term health problems can participate in and enjoy thebenefits of the region's economic success;

� cohesive - with strong, safe and inclusive communities and equality of opportunity.

Section five

33

PICTURED:

Above: Leicester;left: computertechnology onthe move; below:award-winningPoachers Hideaway,Lincolnshire.

Section five

34

PICTURED: STUDENTS AT THE UNIVERSITY OF DERBY, BUXTON, DERBYSHIRE.

In short, a flourishing region - withgrowing and innovative businesses,skilled people in good jobs,participating in healthy, inclusivecommunities and living in thriving andattractive places.

Increasing productivity and economicgrowth are prerequisites for improvingthe quality of our life experience in theregion and form the central objectives ofthis strategy. HM Treasury estimates thatthe trend rate of growth for the UKeconomy is 2.5% per year. To supportour vision for the East Midlands, thisstrategy sets out what needs to be doneto achieve growth rates in the region thatare above the UK trend.

Increased economic growth andproductivity however are not inthemselves sufficient to achieve ourwider aspirations to become a flourishing region. Regions that are truly flourishing will be more vibrant and dynamic places to live,work, invest and spend leisure time. They will be more productive, more entrepreneurial, more creative and healthier. Individualswill be more engaged with each other and in civic, cultural and community life. Achieving such an ambition requires clear decisionsabout what our increasing economic wealth should ‘buy’ for the region. Economic wellbeing - growth, but not at any cost - is a clearaspiration for the East Midlands, a region in which economic success is sustainable and will buy improved life chances for all itscurrent and future residents.

Sustainable development

Sustainable development will be a key element underpinning all activity in support of the RES vision. The RES embodies andintegrates the principles (see table on page 37) of the UK Sustainable Development Strategy, Securing the Future which seeks topromote development which enables ‘all people throughout the world to satisfy their basic needs and enjoy a better quality of life,without compromising the quality of life of future generations.’ 33

The development of a flourishing region characterised by economic wellbeing is how the East Midlands will deliver sustainabledevelopment. It is the responsibility of all partners to ensure that economic, social and environmental development go hand in hand.Economic wellbeing is concerned with growth, but not at any cost. The East Midlands aspires to be a region in which economicsuccess is sustainable and will buy improved life chances for all its current and future residents.

These principles are embedded throughout this RES. In addition, the following four priorityareas outlined in the national strategy have informed the development of the RES :

Sustainable consumption and production is concerned with achieving morewith less and breaking the link between economic growth and environmentaldegradation. This is an explicit aspiration of the RES as embodied in economicwellbeing and explicitly in the Environmental Protection, and Energy and Resourcesstrategic priorities.

Climate change and energy is concerned with seeking a profound change inthe way in which we generate and use energy to lessen the impact on climatechange. The Energy and Resources strategic priority highlights the need for theregion to respond to the economic threats and opportunities associated with climatechange and make the transition to a low carbon economy.

Section five

35

Sustainabledevelopment will be a key elementunderpinning allactivity in support of the RES vision.

CHART 3 : A flourishing region

Section five

36

PICTURED:

Brocks Hill VisitorCentre and CountryPark, Leicestershire.

Natural resource protection and environmental enhancement is about ensuring a decent environment for all and the

better use of resources vital to our existence. The RES recognises the critical importance of the environment both in terms of the

support services it provides and its contribution to our quality of life. These contributions are addressed in the Environmental

Protection strategic priority.

Creating sustainable communities that embody sustainable development principles is integrated throughout this RES.

A flourishing region is a more vibrant and dynamic place to live, work, invest and spend leisure time; it will be more productive,

more entrepreneurial, more creative and healthier; and, individuals will be more engaged with each other and in civic, cultural and

community life.

Our approach reflects and flows from the aims of the ‘Integrated Regional Strategy’ which states:

‘The East Midlands will be recognised as a region with a high quality of life and sustainable communities that thrives

because of its vibrant economy, rich cultural and environmental diversity and the way it creatively addresses social

inequalities, manages its resources and contributes to a safer, more inclusive society.’ 35

We have undertaken a combined Sustainability Appraisal and Strategic Environmental Assessment. This assessed the RES against

objectives agreed with statutory consultees and their key stakeholders, and is available in a complementary document.

Section five

37

LIVING WITHINENVIRONMENTAL LIMITS

Respecting the limits of theplanet’s environment, resourcesand biodiversity - to improve ourenvironment and ensure that thenatural resources needed for lifeare unimpaired and remain so forfuture generations.

ENSURING A STRONG,HEALTHY AND JUST

SOCIETY

Meeting the diverse needs of allpeople in existing and futurecommunities, promoting personalwellbeing, social cohesion andinclusion, and creating equalopportunity for all.

GUIDING PRINCIPLES OF THE UK SUSTAINABLE DEVELOPMENT STRATEGY

ACHIEVING ASUSTAINABLE ECONOMY

Building a strong, stable andsustainable economy whichprovides prosperity andopportunities for all, and in whichenvironmental and social costs fallon those who impose them(polluter pays), and efficientresources use is incentivised.

PROMOTING GOODGOVERNANCE

Actively promoting effective,participative systems ofgovernance in all levels of society- engaging people’s creativity,energy and diversity.

USING SOUND SCIENCERESPONSIBLY

Ensuring policy is developed andimplemented on the basis ofstrong scientific evidence, whilsttaking into account scientificuncertainty (through theprecautionary principle34) as wellas public attitudes and values.

Targets and measures

The vision for 2020 builds on the Top 20 ambition set out in the region's previous economic strategies. The region has embraced

the vision to be ‘one of Europe's Top 20 regions by 2010’, measured against a basket of economic and environmental indices.

Regional progress has also been measured against the Government's targets as well as the targets set against specific actions in

both ‘Prosperity through People’ and ‘Destination 2010’.36

emda has committed to continue to measure progress against the ‘Top 20’ index until 2010. Seven years on from the setting of this

ambition, we have a hugely improved evidence base, a very clear understanding of the characteristics of and challenges facing

the region and new priorities and opportunities have emerged. It is therefore time to review our targets to ensure they reflect and

drive our ambitions for 2020. To measure our vision for 2020 we have developed a new performance management framework,

illustrated in chart 4 below.

We intend, for the first time, to add an

additional basket of measures to enable

us to gauge our progress towards the

wider vision of a flourishing region. A

groundbreaking composite measure of

economic wellbeing is included - the

‘Regional Index of Sustainable

Economic Wellbeing’ (Regional ISEW).

This enables us to take account of

factors such as the value of voluntary

work, the costs of pollution, the quality

of the natural environment and the costs

of crime. It enables the region to

measure its aspirations to ensure that

economic growth and increased

productivity are shared for the benefit of

the whole region, that disparities within

the region are being addressed and

that our ambitions for increasingly

cohesive, inclusive and participative

communities are being fulfilled. A more

detailed description of ISEW is provided

in Annex A.

Central to measuring our progress will remain our key economic indicators. Therefore the second tier measures two high level

outcome measures - GVA per hour worked (the most appropriate measure of productivity at regional level) and the Employment

Rate for the population of working age. These will provide the overarching context. We intend to combine these measures into a

single set of targets providing a framework which will enable the region to track progress in terms of our overall economic aims and

identify where the economy is performing well and where it is not.

The next tier of the framework is comprised of a basket of indicators directly aligned to the 10 RES Strategic Priorities. These

indicators describe the positive regional ‘outcomes’ that partners' activity will influence. A summary of these indicators is provided

in chart 5 on pages 40 and 41.

The base tier of this framework will be the ‘output’ indicators, which directly measure the performance of regional partners' activity

directed towards RES objectives.

Together these measures and indicators provide an overall framework for monitoring our progress towards sustained and sustainable

economic growth in the East Midlands. A detailed description of our approach is available from www.emintelligence.com as a

technical paper.

Section five

38

CHART 4 : RES Performance Management Framework

Section five

39

PICTURED: HILL HOLT WOOD, ENVIRONMENTAL SOCIAL ENTERPRISE, LINCOLNSHIRE.

Section five

40

Vision

Productivity

Employment rate

Employment, learningand skills

Enterprise andbusiness support

Innovation

East Midlands £8,953per capita (2004).

East Midlands: 98.5%of the UK average(2004).

East Midlands rate:75.4%; UK rate: 74.2%(2004).

Mean employment ratein bottom decile ofLADs/UAs: 65.2%(2004).

East Midlands: 25%;UK: 28.6% (2003).

K1- East Midlands:24.3%;

UK: 32.1%

K4- East Midlands:38.7%;

UK: 30.9% (2003).

East Midlands: 35; UK:38 (2004).

East Midlands: 70.6%;UK: 68.9% (businessesregistering in 2001 andsurviving three years).

East Midlands: 2.3%;UK: 2.1% (2002).

East Midlands: 4%; UK:9% (2001).

CHART 5 : Summary of indicators

Proposed targetMeasure to beapplied

Baseline

Regional Index ofSustainableEconomic Wellbeing.

GVA per hourworked.

Employment rate (%working age).

Percentage ofeconomically activeadults qualified toLevel 4 or higher.

Employment in K1high knowledgeintensive sectors andK4 low knowledgeintensive sectors.

Business registrationrate (per 10,000population).

Proportion ofbusinesses surviving3 years.

Gross DomesticExpenditure on R&D(GERD).

% of businesses'turnover attributableto new & improvedproducts.

To improve the region'sperformance against the ISEWindicators.

To increase GVA per hourworked to the national average,i.e. GVA in the East Midlandswill be 100% of the UK averageby 2009.

To achieve an employment rateabove 76% of the working agepopulation by 2009 and toremain at least one percentagepoint above the UK average.

To address sub-regionaldisparities, increase theemployment rate of the bottomdecile of LADs/UAs to 70% by2009.

To increase the proportion ofeconomically active adultsqualified to a Level 4 or aboveto 30% by 2009.

To increase the proportion ofemployment in K1 sectors towithin 4 percentage points ofthe UK average by 2009; and toreduce the share of employmentin K4 sectors to level with theUK average by 2009.

Increase the rate of VATregistrations to 40 per 10,000population head and be atleast level with the UK averageby 2009.

Maintain a 3 year survival rateabove the UK average and beat least at 71% by 2009.

To increase gross domesticexpenditure on R&D to 2.5% ofGVA by 2009.

To increase the proportion ofbusiness turnover attributableto new and improved productsto 6% by 2009.

Section five

41

Transport andlogistics

Energy and resources

Environmentalprotection

Land anddevelopment

Cohesivecommunities

Economic renewal

Economic inclusion

East Midlands: 20.5%.Great Britain: 27.2%(autumn, 2004).

Total CO2 emissions per£ million GVA in EastMidlands: 181.2 tonnescarbon equivalent;England: 149.8 tonnescarbon equivalent(2003).

Total waste producedper £ million GVA inEast Midlands: 327.1tonnes; England: 228.5tonnes (2003).

East Midlands rivers of'good' chemical quality:55% (2004)East Midlands rivers of'good' biologicalquality: 61% (2004).

East Midlands: 1999-2004 average growthrate of 1.6% (2003-2004 growth rate wasnegative, at -0.2%)England: 1999-2004average: 1.7%.

East Midlands: 44%;England and Wales:42%; South West: 51%(2003).

East Midlands: 78.8%;urban areas: 76.2%; ruralareas: 80.9% (2004).

East Midlands: 12.3%;Great Britain: 13.6%;South East: 8.7% (May,2004).

East Midlands average:78.8%; lowest decile:71% (2004).

Proposed targetMeasure to beapplied

Baseline

% of Workforcetravelling to work bypublic transport,walking or cycling.

Carbon dioxideemissions by end userper £ million GVA.

Waste produced per£ million GVA.

Proportion of riverdistance classified as'good' chemical and'good' biologicalquality.

Average annualgrowth rate over a fiveyear period inemployment floorspace.

Participation in formalvoluntary activities inthe last 12 months.

Economic activity rate(% working age) inurban and rural areas.

Proportion of thepopulation of workingage claiming keybenefits.

Economic activityrates in bottom decileof East Midlands LocalAuthority Districts/Unitary Authorities.

To increase the proportion ofthe East Midlands workforcetravelling to work by publictransport, walking or cycling to23% by 2009.

To move towards the nationalaverage in total CO2

emissions per £ million GVAproduced by 2009.

To move towards the nationalaverage in total wasteproduced per £ million GVAby 2009.

To maintain current proportionof East Midlands river length(% of total km) of 'good'chemical and 'good' biologicalquality up to 2009.

To maintain an average annualgrowth rate over a five yearperiod of 1.5% in employmentfloor space by 2009.

Increase the proportion of theEast Midlands populationengaged in formal volunteeringto within 3 percentage points ofthe leading region by 2009.

Maintain rural rates above 80%and increase urban activityrates to 78% by 2009.

To halve the gap between theEast Midlands and the SouthEast from 3.6 percentagepoints to 1.8 percentage pointsby 2009.

Increase economic activityrates in the bottom decile ofLADs/UAs to 75% by 2009.

42

This Strategy is not about ‘quick fixes’. It is about the long term transformation of the East Midlands’ economy. The region has

been challenged by Government to be focused and to make the difficult decisions that are necessary to prioritise our efforts and

generate maximum impact for our resources. Strongly performing regions are characterised by the ability of their institutions to

work together effectively to achieve common goals. The Strategy, therefore, provides leadership, through a shared vision,

underpinned by agreed priorities and actions, to mobilise all regional partners to deliver co-ordinated long-term sustainable

growth to the East Midlands’ economy.

This is an economic strategy, with raising productivity as its key objective. Central to achieving that will be actions which address

innovation; enterprise; employment, learning and skills; and transport connectivity. We are clear, however, that we cannot achieve

this objective without also addressing the environmental and social consequences of increased economic growth.

Growth and economic wellbeing are built on the foundations of a cohesive society and a good quality natural environment. That

growth should not harm the environment or the society in which we live, but where there may be adverse effects, these must be

minimised and mitigated.

The East Midlands is striving to become a flourishing region, with a good quality of life and high - and improving - levels of

economic wellbeing. To do this, action is required against all ten strategic priorities, and the prioritisation between these will

change over time.

Structural themes

The vision to create a flourishing region is supported by three underpinning, or ‘structural’ themes:-

Raising productivity Ensuring sustainability Achieving equality

The Strategy sets out the challenge to achieve more and growing businesses which can compete in a global market, to enable more

people to become more skilled and able to benefit from new and better paid jobs. It highlights the importance of sustainable and

effective transport and infrastructure to support a growing economy and the need to respect and protect the natural environment and

for stronger cities and towns and vibrant rural communities to ensure that they are attractive places to live and work.

Section six

Introduction tostructural themes

Strategic priorities

These objectives will be achieved through 10 strategic priorities:

Employment, learning and skills

Enterprise and business support

Innovation

Transport and logistics

Energy and resources

Environmental protection

Land and development

Cohesive communities

Economic renewal

Economic inclusion

There are strong links between each of the priorities; each is interdependent with the others. To make the organisation of the

Strategy as simple and clear as possible, however, the priorities are grouped as shown in the colour chart and they are loosely

grouped under the three structural themes. They are not in priority order but do attempt to follow a logical flow.

Linkages

The linkages between the vision,

themes, strategic priorities and actions

are expressed as follows:

Section six

43

Raising productivity

Ensuring sustainability

Achieving equality

To increase wealth by making the East Midlands and its people more productive.

To develop and enhance the region's communities, and its assets of physicalinfrastructure and the natural environment to ensure they contribute effectively tothe region's productivity and economic wellbeing, both now, and into the future.

To reduce economic inequalities and increase productivity by ensuring thateveryone has the opportunity to contribute to and benefit from the region'ssustainable economic growth.

STRUCTURAL THEMES AIM

VISION

3 STRUCTURAL THEMES

10 STRATEGIC PRIORITIES

ACTIONS

Priority actions

This Strategy does not propose short-term solutions; it recognises that long term transformation requires us to be bold in our

thinking, but realistic in our ambitions. It also requires that we prioritise our investments to achieve maximum long term returns. The

strategic priorities identified in this Strategy will lead to action on the ground. Those actions likely to have the most significant impact

on the regional economy, which together will help us achieve our regional goals faster and more effectively, are described as

‘transformational actions’. These are listed in chart 6 on pages 46 and 47.

Section six

44

STRATEGIC PRIORITIES AIM

Employment, learningand skills

Enterprise andbusiness support

Innovation

Transport and logistics

Energy and resources

Environmental

protection

Land and development

Cohesive communities

Economic renewal

Economic inclusion

To move more people into better jobs in growing businesses.

To become a region of highly productive, globally competitivebusinesses.

To develop a dynamic region founded upon innovative andknowledge focused businesses competing successfully in aglobal economy.

To improve the quality of regional infrastructure to enable betterconnectivity within and outside the region.

To transform the way we use resources and use and generateenergy to ensure a sustainable economy, a high qualityenvironment and lessen the impact on climate change.

To protect and enhance the region's environment throughsustainable economic growth.

To ensure that the quality and supply of development land, andbalance between competing land uses, contributes towardssustainable growth of the regional economy.

To increase life chances for all leading to stronger and morecohesive communities, a dynamic society and a stronger economy.

To ensure all people and communities have the opportunity tocreate new and sustainable economic futures.

To help overcome the barriers, or market failures, that preventpeople from participating fully in the regional and local economy.

Section six

45

PICTURED: SILSON LTD, NORTHAMPTONSHIRE.

Section six

46

Increase the proportion of the adult workforce studying for and gaining newqualifications by developing clear learning pathways for people in work to progress fromSkills for Life through to Foundation degrees through:

� improving the integration of existing qualifications;� improving access to and completion of programmes targeted at gaining Skills for

Life (basic skills);� providing access to further opportunities to develop high level skills that are relevant

to the economy;� providing meaningful information to young people and those in work about the likely

outcome of their chosen learning pathways including information on potentialearnings, career opportunities and further skills needs.

Create a coordinated long-term campaign to develop enterprise skills, raise the profile ofenterprise and help people identify opportunities; focussing on people aged 35-55,particularly women. The 35-55 age group are proven to have the capital, competence andideas to successfully start a new business.

Provide best practice support through the Business Link brand, linked to the enterprisecampaign, to ensure that all people are offered:� consistent high quality advice prior to setting up their businesses, irrespective of

where they are based in the region, that is tailored to their individual needs;� ongoing business support as their business grows that is targeted at increasing

survival rates amongst the businesses that are 12 to 36 months old.

Introduce more effective initiatives to facilitate greater collaboration between businessesand the regional research community, including the universities, with the aim of:

� matching research capability to business needs, leading to increasedcommercialisation of the region's scientific excellence;

� exploiting the benefits associated with wider intellectual property rights in order todevelop innovative new products and services and create new market opportunities;

� providing specific business support throughout the commercialisation process.

To maximise the contribution the region's transport infrastructure and services make to thedelivery of the RES objectives, the following actions will be promoted by regional partnersto be taken through national agencies, RSS and RTS, Local Transport Plans andDevelopment Frameworks, and transport operators:

� improve inter and intra-regional connectivity by strengthening links between theregion’s main urban centres, improving reliability on key routes for passengers andfreight, and address poor connectivity or capacity to key centres in other regions,including London, Leeds, Birmingham, and Manchester;

� improve international accessibility by improving surface access to NEMA and otherairports serving the region (including Robin Hood Doncaster Sheffield), andstrengthening connectivity to mainland Europe by a range of modes, including railvia London;

� support regional regeneration and growth by improving access from all communitiesto employment and maximising the impacts of economic drivers and growth areas,unlocking investment sites in disadvantaged communities, and addressing inequalityby improving accessibility;

� contribute to environmental, quality of life, and wellbeing indicators by implementingdemand management measures, and access to recreation, sport, and cultural facilities.

CHART 6 : Transformational actions

Details of specific priority actionPRIORITY ACTIONS

Developing adultworkforce skills(Pathways forLearning)

Targeted provision toimprove businesscreation

Increase businesssurvival

Commercialisingscientific excellencethrough facilitatedbusiness collaboration

Improve transportconnectivity andaccessibility

Section six

47

Develop land, property and facilities which maximise opportunities for collaborativeinnovation activities and inward investment by providing quality sites and buildings whichsupport enterprise development. Proposed developments should:

� be linked to RES Priority Sectors;

� maximise clustering benefits;

� improve links between academic institutions and businesses;

� be supported by the work of Innovation East Midlands and blueprint;

� encourage sustainable building design.

Promote the development of a more secure, diverse and sustainable energy and wasteinfrastructure and innovative approaches to providing energy and waste services withinour economy by:

� promoting and investing in renewable and low carbon energy generation;

� promoting and investing in diverse and localised energy supply;

� promoting and investing in diverse and localised waste management;

� influencing private sector utilities and regulators concerning the capacity andlongevity of existing supply and distribution and waste management infrastructure.

Stimulate new local markets and enterprise opportunities by unlocking the potential oflocal procurement by:

� encouraging local public authorities to adopt procurement approaches which deliverlocal, social, environmental and community benefits;

� the voluntary and community sectors have an important role to play working withemployment, education and training providers to develop holistic and integratedsolutions to the needs of excluded individuals;

� embedding large scale employers in businesses into local areas through supply chaindiversity initiatives.

Improve the employability of those without skills and qualifications through:

� the provision of Skills for Life (including ESOL, vocational and core employability skills);

� encouraging the take up of level 2 qualifications.

Ensure the region consistently generates entrepreneurs from all sections of society by:

� promoting entrepreneurship as a viable career choice through targeted awarenessraising activities (see priority action 2b-1 under the Enterprise and BusinessSupport section);

� integrating entrepreneurship at all levels of the education curriculum (schools, FE andHE) and creating effective links between education institutions and businesses;

� providing business support appropriate to all sections of society (see the priorityaction 9a-2 under Economic Renewal).

Details of specific priority actionPRIORITY ACTIONS

Development of landand property

Energy and wastecapacity

New markets andenterpriseopportunities

Enhance employabilityof the mostdisadvantaged

Developentrepreneurshipskills

48

Section seven

Structural theme 1

PICTURED:

CliftonPackaging Ltd,Leicester.

49

Raising productivity

AIM: To increase wealth by making the East Midlands and its people more productive.

Context

In the long-term, economic growth, increases in living standards and economic wellbeing depend on sustained growth in productivity.

There are two key aspects to this. The first, delivered by central government, is to provide macroeconomic stability, to give firms and

individuals the confidence to invest for the future. The second, delivered in part at the regional level, is the effective management of

microeconomic reforms to ensure that markets can function effectively and are able to tackle barriers to economic growth. Market

failures, and the actions to alleviate them, occur at all levels of the economy - local, sub-regional, regional and national.

By providing macroeconomic stability and addressing market failures, Government will support the conditions that allow the UK to

achieve a faster rate of growth in productivity and close the gap that exists between the UK and its major competitors such as the United

States, Germany and France. In addition, increased levels of productivity will allow the UK to meet the challenges and opportunities

posed by the development and integration into the global economy of large developing countries such as China and India.

Improving economic performance is not about growth at any cost. Increasing the wealth

of the region and ensuring it is competitive, productive and resilient to external shocks

must be balanced with the need to achieve equality and ensure sustainability.

The productivity of the sectors and sub-regions that make up the regional economy is far

from even. Just as the region has a number of highly productive sectors and locations, it

also has under-performing sectors and localities. If the overall productivity of the region

is to be maximised, we must build on the success of the high-performers and address

the needs of those which have the potential to perform more highly.

Scale of the challenge

Given the relatively high employment rate and low unemployment rate in the East Midlands37 there is limited scope for increasing

economic performance simply through increased labour market participation. The challenge is to increase economic performance

by making the region and its workers more productive and internationally competitive, in part by increasing skill levels and

innovation. Section 4 describes in detail the productivity gap that exists between our major international competitors and with other

parts of the UK. It also provides an overview of the region's performance against each of the factors, identified by the Government,

that drive productivity - investment, innovation, skills, enterprise, and competition, along with employment.

Raisingproductivity

employment, learning and skills enterprise and business support innovationtransport and logistics energy resource environmental protection land and development

economic renewal social capital economic inclusion

In the long-term,economic growth,increases in livingstandards andeconomic wellbeingdepend on sustainedgrowth in productivity.

50

employment, learning and skills enterprise and business support innovationtransport and logistics energy resource environmental protection land and development

economic renewal social capital economic inclusion

51

PICTURED:

Above: SystemsEngineering InnovationCentre (SEIC),Loughborough;left: CriticalPharmaceuticals,BioCity, Nottingham;below: KatapultStudios, Derby.

employment, learning and skills enterprise and business support innovationtransport and logistics energy resource environmental protection land and development

economic renewal social capital economic inclusion

52

PICTURED: DISABILITY DIRECT, DERBY.

Drivers of productivity

For the purposes of this document, competition and investment are contained within a general enterprise commentary. Whilst

this provides a convenient framework for discussion, the way these drivers interact

to deliver regional productivity is complex. These priorities are not ends in

themselves and should be seen in the context of their impact on the economic

wellbeing of the region.

In summary, levels of investment by businesses in the region are lower than

average. Levels of investment in innovation are relatively high but concentrated in

a small number of large companies. Workforce skills are lower than the UK average

and enterprise activity needs to increase if we are to challenge our major

competitors. The region is more exposed to international competition than most,

with higher than average levels of exports.

It is difficult to identify productivity at a sub-regional level as data for ‘output per hour worked’ is not available. However, we can use

‘output per head’ to highlight disparities. Productivity measured using ‘output per head’ is almost one third higher than the national

average in Nottingham, but significantly below the national average in more isolated areas such as North East Derbyshire and

Lincolnshire. Key findings from the evidence suggest:38

� Gross Value Added (GVA) per head is highest in Nottingham, where it is 32% above the UK and East Midlands’

averages, and Derby, where it is 26% above the UK average;

� GVA per head is also above the UK and East Midlands’ averages in Leicester and Northamptonshire; and

� GVA per head is below the UK and East Midlands’ averages in much of the rest of the region.

Aligned to the problem of low productivity is the existence of a 'low-wage low-skill'

equilibrium in the region. This is characterised by a high employment rate coupled

with a low demand for skills and comparatively low wages. There are also significant

disparities in skills levels within the East Midlands - NVQ Level 4 qualifications are

highest in Rutland and lowest in Leicester.39

As centres of economic activity in the region, our cities and major towns are key

drivers of regional economic performance. Cities offer ready access to large numbers

of consumers of goods and services, and inputs to the production process. They are

also sources of employment, leisure and cultural activities. There is a close

interdependency between urban and rural areas which goes beyond commuting to

work and urban facilities. Efficient and sustainable transport and other linkages

between urban and rural areas are critical to ensure both economic productivity and quality of life. But the importance of promoting

enterprise and innovation in rural areas also relates to the need to improve productivity in these areas in their own right.

employment, learning and skills enterprise and business support innovationtransport and logistics energy resource environmental protection land and development

economic renewal social capital economic inclusion

Aligned to theproblem of lowproductivity is theexistence of a'low-wage low-skill' equilibrium inthe region.

Levels of investmentin innovation arerelatively high butconcentrated in asmall number of largecompanies.

53

PICTURED:

The Joseph WrightCentre, Derby College,Derby.

54

1

AIM: More people into better jobs in growing businesses.

Introduction

A dynamic, flexible and skilled workforce helps businesses to remain competitive and profitable. Investment in developing the skills

of their employees helps businesses to adapt to change, adopt new technologies and processes, and attract investment. In the

East Midlands the employment rate is above the UK average. However, a high proportion of jobs are low skilled, low paid and

require few or no qualifications. Given the changing demographics in the region this is a particular challenge, especially in areas

such as Lincolnshire where labour market pressures among this group are expected to be particularly acute. Despite a high

employment rate there are substantial pockets of high unemployment, especially in the major urban centres of Derby, Leicester and

Nottingham, former coalfields communities and remote rural areas. Due to the tight labour market conditions in much of the region,

future economic growth can only be driven by increasing the quality of the jobs in the East Midlands.

The Employment, Skills and Productivity Partnership (esp) produced an evidence-based action plan in June 2005 outlining a range of

regional priorities. This work has substantially supported the development of the employment, learning and skills section of the RES.

1a. Developing the skill levels of the current and future workforce

Although the East Midlands has a comparatively high level of employment, it compares less well in measures of the quality of labour.The proportion of the workforce with no qualifications is comparatively high, especially amongst the older sections of the workforce,and the region also lags the national average in terms of higher level qualifications.40 The region must develop a core workforcewith intermediate or technician level skills. Ensuring the correct mix of levels and skillsis vital to sustainable economic growth. A low demand for skills, related to a largeproportion of employers engaged in relatively low value activities compared to otherUK regions, means that there is a reduced incentive for individuals to invest in theirown development.

Raising participation and attainment amongst young people between the ages of 14and 19 is crucial to the development of a skilled and motivated workforce. Creatingvocational diplomas that meet employer needs, expanding opportunities for youngpeople to learn in the workplace and developing a culture of enterprise are all key tobusinesses getting employees with the skills they require. This can only be achievedby businesses getting involved in the development and delivery of the curriculum. Improving employability skills and workreadiness is also key. Employers frequently cite such qualities as effective communication and team working as the keyrequirements often most lacking in applicants for vacant posts. However, although improvements in the qualifications of youngpeople are a key priority - and recent improvements in the compulsory education system have been significant - the highemployment rate coupled with the ageing population means that the majority of the workforce needed for 2012 is already inemployment. Therefore a coordinated approach is required to encourage individuals to realise the benefits of continually re-skillingand up-skilling. Skills for Life (literacy, numeracy and IT) are still lacking in a significant proportion of the working population.

Employment,learning and skills

employment, learning and skills enterprise and business support innovationtransport and logistics energy resource environmental protection land and development

economic renewal social capital economic inclusion

The proportion of theworkforce with noqualifications iscomparatively high,especially amongstthe older sections.

55

Additionally, higher proportions of individuals with no qualifications are concentrated amongst older workers in the region. There isa general recognition that technological change, principally the proliferation of ICT in the workplace, and the changing structure ofthe economy has pushed the overall demand for higher level skills upwards. The EastMidlands appears to fall behind other regions in measures of both the supply and thedemand of higher level skills. This is a particular concern that must be addressed. Toensure the supply of the skills needed by the modern economy, from basic skillsthrough to higher level skills, progression routes need to be created for individualsthroughout their working lives, including access to work-based training.

Whilst there might be an adverse impact on productivity in the short term by helpingthose on the fringes of the labour market who lack basic skills, in the long run the effortof increasing participation will be beneficial.

1b. Stimulating business demand for skills

If employers are to become more competitive and meet the challenges identified earlier, they will require a workforce with higherlevel and transferable skills. This requires a commitment to training and development and a change in working practices, which willhave a direct impact on their business performance and competitiveness.41

Business demand for skilled people is comparatively weak in the East Midlands. Whilst businesses report skills shortages and hardto fill vacancies, and claim that employees lack the skills to help them innovate, employer surveys suggest that businesses do notappear to view investment in training provision as a priority.42

The East Midlands has the smallest proportion of people working in sectors classed as 'knowledge intensive' (i.e. employing morethan 40% graduates), of all the English regions.43 Moreover, the public sector accounts for a substantial proportion of that total. Inthe East Midlands, a weaker than average demand for higher level skills can be associated with a comparatively small number ofbusinesses engaged in high value production and service activities. The comparatively large number of businesses engaged inlow value activities, results in a low demand for skills, and lower than average wages.

As a result, large proportions of the region's workforce appear to be underutilised in their current jobs. Evidence suggests that only24.1% of the workforce with a Level 3 and 52.1% of those with a Level 4 qualification felt that these qualifications were needed for

employment, learning and skills enterprise and business support innovationtransport and logistics energy resource environmental protection land and development

economic renewal social capital economic inclusion

56

ENGAGING SCHOOLS AND COLLEGES WITH BUSINESSESEquip school and college leavers with the skills and knowledge that businesses require by:

� developing stronger linkages between education providers and employers;

� working with businesses to ensure that every young person has access to a weeks work experience every year

from the age of 14;

� improving the delivery of the provision and coordination of STEM (Sciences, Technology, Engineering and

Maths) subjects, along with work-readiness of school leavers.

DEVELOPING ADULT WORKFORCE SKILLS (Pathways for Learning)Increase the proportion of the adult workforce studying for and gaining new qualifications by developing clear

learning pathways for people in work to progress from Skills for Life through to Foundation degrees through:

� improving the integration of existing qualifications;

� providing access to further opportunities to develop high level skills that are relevant to the economy;

� providing meaningful information to young people and those in work about the likely outcome of their chosen

learning pathways including information on potential earnings, career opportunities and further skills needs.

1a PRIORITY ACTIONS

Progression routesneed to be created forindividuals throughouttheir working lives,including access towork-based training.

employment, learning and skills enterprise and business support innovationtransport and logistics energy resource environmental protection land and development

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PICTURED:Above left to right:University of Derby, Buxton;June Hunter of Accordia,Nottingham; bottom left:new business start-up, over45s into work, Phil Stevensof Corby; surveyor forWestfield on-site at theEagle Centre in Derby.

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employment, learning and skills enterprise and business support innovationtransport and logistics energy resource environmental protection land and development

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PICTURED: CRITICAL PHARMACEUTICALS, BIOCITY, NOTTINGHAM.

their current jobs. This suggests that the region is not making full use of available talent, and significant productivity improvementscould be achieved simply through better deployment of the existing workforce.44 This would in turn influence factors like graduateretention. In a 2004 survey of final year undergraduates, a large proportion said that they wanted to live and work in their place ofstudy, citing quality of life and a lively social life as key regional assets. Although many expected to remain in the region in the shortterm, they expected to be in temporary, low paid employment. A limited availability of highly skilled work in the region was cited asa key factor that led these individuals to feel that they would have to leave the region in the medium term to pursue a career.45 Thecomparatively low proportion of knowledge intensive employment in the region supports this perception. Only by increasing thedemand for skills from employers will the East Midlands be able to retain the talent attracted and developed by its universities.

One of the main drivers for increasing the demand for skills is for businesses to adopt business strategies that will move their

products and services up market.46 To seek out domestic and international opportunities and to prosper in higher value markets,

businesses need support to be more innovative and enterprising. For some

businesses developing radically new product market strategies is not a viable or

desirable option. However, significant productivity improvements can be achieved

through improving deployment within the workplace. Research has suggested that

improved work organisation can increase the performance at the level of the

individual firm,47 which in turn can have wider impacts on the deployment of the skills

already available in the current workforce, ultimately, contributing to increased

regional productivity.

Fundamental to achieving these developments are strong leaders and competent

managers. When surveyed, East Midlands’ employers reported that two thirds of

managers lack the management skills required for them to carry out their jobs to their

full potential, which is double the rate for the rest of the country.48

1c. Improving the infrastructure and responsiveness of skills supply

If demand for skills development is to be stimulated amongst individuals and employers in the region, then training provision mustmeet expectations and be better tailored to meet the demands of the changing economy. The region needs training providers(including colleges, universities, and private and voluntary providers) which can respond quickly, flexibly and effectively to theneeds of employers and learners. Moreover, the primary purpose of publicly funded adult training should be to improveemployability and supply economically valuable skills. In a recent survey of public opinion to inform the Foster Review of FEcolleges, this view was supported by the majority of respondents who felt that the principal role of FE should be to equip peoplefor the labour market.49 This means that provision must be prioritised to meet the needs of the regional economy.

The capacity of the region's education and training infrastructure will also need to be developed. Research undertaken by LifelongLearning UK, the sector skills council responsible for education and training providers, suggests that teaching staff make up asmaller proportion of the sector's workforce in the East Midlands than in any other region.50 Investment should not only improve the

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One of the main driversfor increasing thedemand for skills is forbusinesses to adoptbusiness strategies thatwill move their productsand services up market.

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STIMULATING SKILLS DEMANDEncourage employers to stimulate demand for high level and transferable skills by:� promoting the adoption of innovative working practices, including effective work organisation and

employee development;� using public procurement to promote skills development;� providing support and ensuring easy access to information about how to develop the skills of the workforce

(including a published network of named contacts in further and higher education that businesses can contactdirectly to diagnose and discuss their needs);

� providing consistent and relevant business support, advice and guidance;� working with partners to improve management skills in the region.

PRIORITY ACTIONS1b

quality of and access to provision, but also it must ensure that providers themselves are equipped with the necessary skills andknowledge. Businesses should only be referred to providers that have demonstrated their ability to engage effectively withemployers and deliver a quality service that is consistent with the requirements of the regional economy.

1d. Exploiting the opportunity of Higher Education

The region's ten Higher Education Institutions (HEIs)51 offer considerable potential for the attraction of talent, are significant employersin their own right, and are key links in regional knowledge networks. Effective engagement with the region's HEIs will be a crucial factorin delivering our regional objectives. The region's universities directly employ over 19,000 people and it is estimated that staff salariesaugmented by the expenditure of over 122,000 full time students, generates a direct contribution of £384.8m to the regional economy.Indirectly, through capital programmes and their supply chains, our universities influence some £1.15 billion of expenditure,representing just over 2% of regional GDP influencing some 30,500 jobs or 1.8% of East Midlands’ employment.52

The Government commissioned Leitch Review seeks to identify the UK's optimal skills mix to maximise economic growth andproductivity in 2020.53 Analysis from the interim report concludes that in order to take account of global, demographic andtechnological change the UK will have to increase the level of skills in the current workforce. On current measures output per houris almost 30% higher in France and 10% higher in Germany than the UK. Universities will be key to developing those higher levelskills and provision will increasingly need to be tailored to meet the future needs of employers.

There is a clear challenge for the higher education sector to meet the future needs of the economy. The Leitch Review estimatesthat there must be an increase from 27% to 38% of adults with Level 4 or above qualifications, if the Government is to achieve itsnational productivity targets for 2020. This accounts for an additional 5.4 million individuals nationally. Furthermore, employersreport having real skills shortages in 'specialist and professional skills' hindering movement to higher specification products.

Moreover the East Midlands will continue to face skills shortages if it only relies on the supply of young people entering employment.With a maturing population and a decreasing supply of young talent we know that most of the workforce required for 2020 is alreadyin employment. This presents a particular challenge to our regional universities as they are more likely than universities in otherregions to have an intake in the traditional 18 -21 age group.54

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MATCHING SKILLS PROVISION TO EMPLOYER DEMANDPrioritise resources in order to further develop the education and training infrastructure, capacity and qualityassurance in order to deliver the skills demanded by employers in a growing economy by:� ensuring courses are aligned to an ongoing assessment of skills needs;� developing new management and leadership programmes from a regional strategy based on generic and

sectoral input;� ensuring that the design and delivery of vocational based learning is fit for purpose, delivering programmes

that are up to date, use industry relevant technologies and a mix of learning techniques to improve flexibility oflearning options;

� developing a specific programme of activity aimed at matching the type and supply of future higher level skillsin further and higher education institutions to the needs of business.

1c PRIORITY ACTIONS

EXPLOITING THE OPPORTUNITY OF HIGHER EDUCATIONEnsure that adult learners, irrespective of age, gender or location, have access to academic and vocationalqualifications to Level 4 and above whilst remaining engaged in the workforce by:� developing lifelong learning networks to link further and higher education to improve access to skills provision; and� supporting HEIs to increase the flexibility of their offer so more people already in the workforce have an opportunity

to gain higher level skills.

1d PRIORITY ACTIONS

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Percentage of economically activeadults qualified to Level 4 or higher.

Employment in K1 high knowledgeintensive sectors and K4 lowknowledge intensive sectors.

To increase the proportion of economically activeadults qualified to a Level 4 or above to 30%by 2009.

To increase the proportion of employment in K1 sectorsto within 4 percentage points of the UK average by 2009;and to reduce the share of employment in K4 sectors tolevel with the UK average by 2009.

INDICATORS OF SUCCESS for Employment, Learning and Skills

PICTURED: TRANSMITTON LTD, LEICESTERSHIRE.

PICTURED:

Video conferencetraining at the Centrefor TechnologyExcellence inEdwinstowe,Nottinghamshire.

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2

AIM: To become a region of highly productive, globally competitive businesses.

Introduction

Enterprise, and the support services that contribute to it, is important because new businesses increase competition, whichprovides an incentive for new products and processes, and leads to a more productive allocation of resources in the economy.However, enterprise is not just about new businesses. Entrepreneurial activity also takes place in existing businesses.

Since 2003 the East Midlands has started to generate new businesses in greater numbers. This has contributed to our improvedeconomic progress. However, there is a long way to go in developing a vibrant enterprise culture in all parts of the region. There isalso a growing need to help the existing stock of firms adapt to increasing international competition. Public and private sectorbusiness services must help regional businesses innovate and invest in creating new processes, products and markets.

A culture of enterprise exists when people are seeking out opportunities to be entrepreneurs and are supported and encouragedto do so. It is based on shared, explicit support for and recognition of entrepreneurship as an option and an opportunity forindividuals to realise personal ambitions and goals.55

Individuals in the East Midlands have much higher levels of awareness and positive attitudes to entrepreneurship than the UKaverage.56 However, these factors have not translated into business formation rates. As such, there has been only a slightimprovement in the numbers of people in the region considering going into business over the last few years. A region with a strongentrepreneurial base is responsive to structural economic change. Through innovation and creativity it stimulates and exploits newmarket opportunities and it creates jobs and contributes to economic growth.

2a. Building an enterprise culture

Enterprise skills drive the region's economy through the capability of its businesses, institutions and workforce to adapt to constantly

changing environments on which productivity and competitiveness can be built.

The need to establish a culture of enterprise is interwoven throughout this document. The region can only fundamentally develop if

the educational base embraces an entrepreneurial culture and understands the need for key skills such as communication, problem

solving and risk taking. Accelerating industrial and technological change will demand enterprising skills and these skills are

increasingly valued by employers and within society. Furthermore, demographic change will also mean that one third of enterprises

will need to be transferred to the next generation over the coming 10 years.

Embedding enterprise in education is an appropriate starting point. Enterprise education not only nurtures the skills businesses

need, it is also proven to encourage people to set up their own business.57 Current provision of enterprise education needs to be

mainstreamed as a progression starting at primary and continuing through to further and higher education. Enterprise should be

embedded into the curriculum whilst businesses and education partnerships are nurtured and enhanced.

Enterprise andbusiness support

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2b. Creating a dynamic SME base

New businesses create between 20-40%58 of the region's productivity growth and stimulate innovation.59 There has been an

improvement in the number of business start-ups (from 35 VAT registrations per 10,000 population in 1998 to 37 in 2003),60 but the

East Midlands is still below the national average, and there is a drop off in survival rates after 12 months.61

There are many areas of untapped potential. Business start up rates among women are less than half those of men in the East

Midlands.62 Geographically, Nottingham and Derby have particularly low rates of business creation.63 The region also has low rates

of business starts among qualified people aged 35-55.64 This group tends to start the most successful businesses in terms of value

and survival rates. The greatest barrier for start-up in the East Midlands (especially in the 35-55 group) is not entrepreneurial

potential or ideas, but risk aversion- being unwilling to leave secure employment for the potentially risky venture of self-employment

or starting a business.65 Encouraging this group to overcome their risk aversion is key to creating more high value businesses.

As not everyone of working age has had sufficient enterprise education, and given that entrepreneurs learn by experience, the

rationale for public assistance is similar to basic skills development.66 Developing such skills will not always lead to a start-up, but

will nevertheless have positive benefits. The 'Enterprising People' section (Section 10c) discusses how self employment can also

be a powerful tool for economic inclusion among disadvantaged groups.

2c. Supporting innovation and diversification in manufacturing

The region has existing strengths, particularly in manufacturing, which accounts for almost 23% of regional GDP and over 95% of

the region's exports and directly employs more than 300,000 people.67 However, much of the existing business base throughout the

East Midlands has below average productivity.68 Some sectors also have alarmingly low levels of investment.69 These issues are a

source of concern in the face of increasing international competition and exporting is becoming increasingly difficult for standard

services and products.

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HARNESS A CULTURE OF ENTERPRISECreate a continuous path of enterprise education and awareness available to all in the region, linked to the provisionof start-up assistance for those who wish to access it.

2a PRIORITY ACTIONS

TARGETED PROVISION TO IMPROVE BUSINESS CREATIONCreate a coordinated long-term campaign to develop enterprise skills, raise the profile of enterprise and helppeople identify opportunities; focusing on people aged 35-55, particularly women. The 35-55 age group is provento have the capital, competence and ideas to successfully start a new business.(See priority action 9a-2 which relates to business support for under-represented groups and communities).

INCREASE BUSINESS SURVIVALProvide best practice support through the Business Link brand, linked to the enterprise campaign, to ensure thatall people are offered:� consistent high quality advice prior to setting up their businesses, irrespective of where they are based in the

region, that is tailored to their individual needs;� ongoing business support as their business grows that is targeted at increasing survival rates amongst the

businesses that are 12 to 36 months old.

2b PRIORITY ACTIONS

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PICTURED:

Top left: BusinessLink; top right:Graduate IainJackson at DigitalOffice Systems,Ashby, Leicestershire,below: Clinipol Ltd,Coalville,Leicestershire.

As the pace of technological change speeds up and new industrial economies develop, the manufacturing sector within the region

must recognise that the route to long term success lies in increasing investment and capital intensity, adopting world-class

practices and recognising that innovation, through the continuous introduction of new and differentiated products and services, is

key to regional competitive success. Without this, regional manufacturing risks becoming 'locked in' to a path of relative (or even

absolute) decline and will have a negative impact on regional growth aspirations.

2d. Overcoming barriers to SME growth

Removing barriers to growth is crucial. For an SME or social enterprise, growth brings uncertainty and risk. This challenge is

particularly acute for new or existing firms moving into new markets. These businesses need help in a number of areas including:

developing leadership and management skills; ICT skills; understanding regulation; and entering a new export or product market.

There are also specific market failures around accessing finance, particularly for businesses with early stage technology and high

growth potential. The capital market does not work as effectively when equity investments are below a certain level (HM Treasury

and SBS research suggests £2m).70 This needs to be addressed by a mix of skills development (‘investment readiness’) and the

provision of a carefully targeted 'escalator' of funding assistance. For example, SBS research71 suggests that Regional Venture

Capital Funds have addressed a real gap in the market for equity finance, but that, in

the East Midlands, other gaps remain. To fill these gaps and complement the

Regional Venture Capital Fund, the Enterprise Capital Fund will bridge the equity gap

from £500,000 up to £2m, the Early Growth Fund will encourage angel investment in

earlier stage ventures and the Commercialisation Fund will encourage greater

investment in innovation and research and development.

Regional and sub-regional business service organisations (such as Business Link),

business networks, established businesses, our university business schools, as well

as public and private business advisors all have a part to play in helping firms

overcome these barriers. Business services need to be simplified, coordinated and

adaptable to cater for both the general and specific needs of the business community. The regional Business Link is the key to

improving coordination of business support. Business advice works - companies that take advice report profits double those that

do not. However, only approximately 33% of firms in the East Midlands take advice of any form, and the figure is even lower for

micro businesses.72

Deregulation is also important in removing barriers to growth. Businesses frequently cite the planning system as a barrier to

potential rural diversification and identify the need to work together and with others to reduce the impact of regulatory barriers.73

Access to support services can also be a problem in rural areas.

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The regionalBusiness Link is thekey to improvingcoordination ofbusiness support.

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SUPPORTING INNOVATION & DIVERSIFICATION IN MANUFACTURING Through the national Manufacturing Advisory Service, target support to firms that are ready and willing to innovateand assist their investment in diversifying their products, processes or markets and link these firms to widerBusiness Link support for growth and skill development.

2c PRIORITY ACTIONS

2e. Supporting firms to become internationally competitive andattracting inward investment

Businesses that operate internationally, whether foreign owned or domestic exporters, tend to have higher rates of productivity and

innovation compared to those who only deal in the domestic market.

Strengthening the ability of East Midlands' businesses successfully to exploit overseas markets, and assisting high quality

investment projects to come into the region generates real benefits both for the businesses themselves and for the wider economy.

Recent evidence shows that:

� entry into new overseas markets is one of the potential 'tipping points' in

business development, at which external help in offering new knowledge,

skills or expert advice can have a disproportionately beneficial impact;

� barriers to international trade are real and significant to both experienced

and inexperienced exporters;

� businesses that are innovative, or have previous exporting experience, are

more likely to achieve significant financial benefits.

In a global marketplace it is essential for businesses to identify the best ways in which to grow internationally. Instead of simply

exporting this may involve outsourcing, offshoring or partnering with others to share the risk of large investments or research projects.

Attraction of foreign direct investment (FDI) is important but must be carefully targeted; knowledge-driven and R&D intensive

investments should be given priority over generic low-skilled employment provision. Aftercare relationship management of our existing

foreign investors (investor development) has become increasingly prominent in drawing in additional investment from these firms and

their suppliers.74

It is important to recognise the many connections that the East Midlands has worldwide, such as in culture, sport and education,

provide opportunities for the region's economic development. For instance, the thousands of international students in the region

provide an opportunity to raise the profile of the region overseas. These connections will continue to be developed through partnership

working under the banner of East Midlands International Connections (EMIC).

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PROVIDING HIGH QUALITY BUSINESS SUPPORTDevelop an integrated regional business support network that:� helps SMEs to overcome the knowledge based barriers that can prevent them from maximising growth

opportunities;� provides access to relevant advice and guidance to businesses as they grow and is easy for businesses to

understand and access.

IMPROVING ACCESS TO FINANCECreate a regional 'escalator' of funding sources, from both the public and private sectors, so that businesses haveaccess to appropriate finance as they grow, delivered through:� programmes that ensure that they are ‘investment ready’ to maximise opportunities available to them;� targeted financial support packages for specific business groups.

2d PRIORITY ACTIONS

In a globalmarketplace it isessential forbusinesses to identifythe best ways in whichto grow internationally.

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PICTURED: ENVIRONMENTAL TECHNOLOGY CENTRE AT THE UNIVERSITY OF NOTTINGHAM.

2f. Building the visitor economy

The visitor economy is set to make a growing contribution to the region's prosperity and productivity; providing a range of flexibleemployment opportunities, stimulating enterprise, boosting the region's rural communities, and strengthening the profile of the EastMidlands as a place to visit and invest. The tourism industry is already vital to the region, with £4.4 billion of annual visitor spendingand 150,000 jobs.75

A thriving visitor economy strongly supports and encourages an enterprise culture, asmore than 80% of tourism employment is within SMEs.76 The challenge, however, is toensure that the many micro and lifestyle businesses in the sector (including rural andfarm-based) are given the support required radically to lift standards of product andservice quality, innovate sales and distribution channels; and closely target theirmarketing to attract high value customers.

A major growth opportunity is inbound tourism, where there is potential to increase thenumber of staying visitors. There are major opportunities for attracting more leisure-based visitors from short-haul European marketsand other niche opportunities exist with some long-haul markets, such as USA.

Sophisticated inbound visitors demand high-quality provision, both in terms of facilities and service. In general the quality of theoffer, particularly in terms of accommodation, needs to be upgraded and is a priority investment. Universities in the region have adual contribution to make: they generate inward investment visits as a net importer of students, and they can support the businessinvolved in tourism through both research and management development.

There is significant potential to establish the region as a business tourism hub. This is defined as all travel to meetings, conferencesand exhibitions and represents a major growth opportunity given our central location and transport links. To be internationallycompetitive the region will need a significantly improved offer, which could include a major dedicated conference and exhibitionsfacility or substantial upgrading of existing stock.

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A thriving visitoreconomy stronglysupports andencourages anenterprise culture.

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INCREASING INTERNATIONAL TRADE Support businesses to increase their overseas trade by:� providing tailored export services, including specialist support for businesses looking for opportunities in Brazil,

Russia, India and China (BRIC);� devising programmes to develop business skills in areas such as international sales and marketing, language

and culture;� assisting companies, where appropriate, to internationalise through offshoring, joint ventures and strategic

partnerships.

TARGETING FOREIGN DIRECT INVESTMENT Target FDI activity on those market sectors that are likely to contain knowledge driven, R&D intensive investmentsand back this up with:� specialist support to the investing companies to their local needs, including aftercare support;� specialist support that meets the needs of those larger companies that fall outside mainstream business

support mechanisms.

2e PRIORITY ACTIONS

INCREASING VISITOR SPEND� Target regional and sub-regional marketing and promotion with the aim of increasing visitor spend, particularly

from staying and inbound visitors.� Develop a coordinated campaign to encourage investment in public realm, conferencing and business tourism facilities.

2f PRIORITY ACTIONS

2g. Harnessing culture in the East Midlands

Distinctive destinations, a thriving cultural life and a ‘sense of place’ are crucial to the economic success of the region. Cultural,

arts, heritage, sporting and tourism assets (e.g. theatres, sports venues, historic sites and festivals, cultural and creative businesses

and practitioners) attract and retain skilled and talented investors, graduates and young people. They add immeasurably to the

quality of life of residents and communities. They also support the tourism, cultural and creative industries in making a major

contribution to employment and wealth creation across the region. The Department for Culture, Media and Sport estimates that

cultural and creative industries account for 7.9% of UK GDP. The Cox review highlighted the wider role of creative industries and

the need to enhance business productivity by drawing on our world-class creative capabilities.77 The development of a Cultural

Observatory for the East Midlands in 2006, will enable the examination of the scale and role of creative and cultural industries in

the East Midlands, and allow development of clear targets to measure the growth of this sector in the region.

2h. Supporting SMEs to harness business opportunities such aspublic procurement

Public procurement represents a key opportunity for SMEs to harness regional business opportunities. Data from the Public

Expenditure Statistical Analyses 2005, published by HM Treasury, shows that total identifiable public expenditure in the East

Midlands was around £23.2 billion (£16.5 billion by central government departments

and £6.7 billion by local government) in 2003/04, which is 6.2% of the total for the

UK. This is equivalent to 37% of the value of the East Midlands’ economy, and whilst

not all of this will be available through the procurement process it nevertheless gives

some idea of scale.78

Careful use of public procurement can help stimulate changes in the businesses

involved, including growth, increased diversity, innovation to processes and

products and increased demand for skills. This change can subsequently

encourage firms to access support to meet these new pressures.

Businesses, particularly SMEs and social enterprise, will need to be supported to ensure they are in a strong position to take up the

opportunities in public sector supply chains in all sectors of the economy. In the construction sector in particular, key partners need

to work together with contractors to ensure that skills and employment benefits from major building developments are maximised.

Economic opportunities of London 2012 Olympic and Paralympic Games

Economic opportunities presented to the region as a result of the London 2012 Olympic and Paralympic Games will be both direct

and indirect. They are likely to include: large scale public procurement contracts for goods and services required in the run-up to

the Games; hosting of pre-Games training camps; and additional tourism as a result of increased international profile.

In addition to these direct benefits there may also be less direct or tangible benefits associated with the 'feel-good' factor stemming

from hosting a successful Games in the UK and potential public health benefits linked to the use of the Games to promote

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Careful use ofpublic procurementcan help stimulatechanges in thebusinessesinvolved.

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TARGETING GROWTH OF CREATIVE AND CULTURAL INDUSTRIES � Protect, conserve and enhance the key regional cultural and historic assets to maximise their contribution to the

regional economy.� Support the cultural sector to create opportunities for community participation and to develop social capital.

2g PRIORITY ACTIONS

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PICTURED:

Top left: CheckprintLtd, Leicestershire;left: Under Scan byRafael Lozano-Hemmer; below: fineartist at work in theLCB Depot, Leicester.

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PICTURED: SPORTS FACILITIES AT LOUGHBOROUGH UNIVERSITY.

participation in sport. The experience of non-host regions in Australia at the time of the Sydney Games in 2000, suggests that by

far the most significant of these economic opportunities will be prior to the Games themselves - in particular procurement and pre-

Games training camps. The Games will stimulate considerable tourism activity, particularly before and after the event itself, as the

profile of the UK is raised on the international stage. The region is well placed to exploit this opportunity.

These potential opportunities and benefits cannot be taken for granted. The Australian experience suggests that maximising the

regional benefit derived from the Games will require a huge concerted effort from both public and private sector. Careful targeting

of activity will be key.

The East Midlands has significant advantages as a venue for pre-Games training

camps, including a vibrant and successful centre for performance sport at

Loughborough University, a high concentration of excellent facilities, support

services, coaches and athletes in the region, and a strong sporting heritage, with 22

national governing bodies of sport based in the region.79 In particular we have

excellent facilities, relative proximity to London and low costs relative to London. This

last factor is particularly relevant as a factor in attracting smaller (less well resourced)

Olympic Teams. There are also a range of business opportunities in addition to public

procurement that can help stimulate regional businesses. Supply chains also offer

opportunities but can be difficult for SMEs to access.

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The Games willstimulateconsiderable tourismactivity, particularlybefore and after theevent itself.

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MAXIMISING THE BENEFITS OF PUBLIC PROCUREMENTDevelop a Regional Procurement Opportunities Plan aligned with the National Procurement Portal to open up moremarket opportunities, in the region and nationally, to regional businesses.

MAXIMISING THE BENEFITS OF THE LONDON 2012 OLYMPIC AND PARALYMPIC GAMESDevelop a 2012 Action Plan which:� provides businesses with the information and support they need to bid for contracts associated with the

2012 Games;� optimises the opportunities from the 2012 Games by providing dedicated support/advice to SMEs bidding for

contracts, and the targeted marketing of training facilities; � builds the region's sports infrastructure to attract elite athletes as well as benefit local communities, so a legacy

in terms of skills, health, culture and participation remains.

2h PRIORITY ACTIONS

Business registration rate(per 10,000 population).

Proportion of businessessurviving 3 years.

Increase the rate of VAT registrations to 40 per10,000 population head and be at least level with theUK average by 2009.

Maintain a 3 year survival rate above the UK averageand be at least at 71% by 2009.

INDICATORS OF SUCCESS for Enterprise and Business Support

PICTURED:

Systems EngineeringInnovation Centre(SEIC),Loughborough,Leicestershire.

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3

AIM: To develop a dynamic region founded on innovative and knowledgefocused businesses competing successfully in a global economy.

Introduction

The global economy continues to evolve, with countries becoming ever more interdependent. The emergence of India and China, in

particular, as engines of global growth is beginning to shift the international centre of economic gravity away from the North Atlantic

towards the Pacific. The Government has recognised that the UK must meet this challenge by making the best possible use of the

intellectual assets we possess. There is a requirement to maintain and build upon these assets through greater investment in

innovation, science and technology and to continue to build more productive relationships between business and the knowledge base.

The ‘Knowledge economy’ features strongly in UK and European policy, but it does need to be clearly defined. At its simplest level,

factors such as land, raw materials and cheap labour are no longer enough to produce goods and services that others want to buy.

We must use the capabilities that others cannot match as easily - the knowledge, skills and creativity of the East Midlands’ region.

These assets will allow us to create new paths of development as we become a flourishing region.

Innovation can be described as the successful exploitation of creative ideas, through new products or processes. Design links

creativity with innovation and brings new products and services. A stream of constant, successful innovation is therefore essential if

the East Midlands is to remain competitive and standards of living are to increase. Innovation is also about products and services that

are new to a particular firm

Creating an innovation culture and community across the East Midlands will accelerate

and drive productivity. Nottingham's status as a 'Science City' and the strength and

importance of our region's universities should be fully exploited. Currently, the level of

co-operation between businesses and the knowledge base in the East Midlands lags

behind the leading regions of the UK.80 Businesses must be stimulated and supported

to commercially exploit research excellence, building an economy dependent on

expertise and knowledge. Universities must be motivated to reach out and support

business R&D and knowledge transfer needs. Universities must also be both a source

of new product ideas and technical innovation and the capabilities to exploit new ideas.

A competitive region actively brings together its science and industry base to increase the rate and level of innovation across

the region.

These activities also need to build on our existing strengths as well as developing new areas of activity. The region has a strong

industrial heritage and the manufacturing sector still accounts for 23% of the region's GDP. Developing economies, such as China and

India, currently concentrate on labour intensive, standardised processes but this is beginning to change. As these countries move into

higher value-added products so manufacturers in the East Midlands will need to respond by becoming more agile and identifying

niche value-added markets through greater understanding and adoption of innovation and design best practice.

Innovation

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Creating aninnovation culture andcommunity across theEast Midlands willaccelerate and driveproductivity.

3a. Increasing investment in research and development

The capacity of businesses to innovate is directly linked to their long term sustainability and growth. Investment in research

and development and design is positively linked to business performance measures such as sales growth, efficiency and

market capitalisation.81

Research and development investment in the East Midlands is dominated by a few

large businesses with significant R&D capacity, with relatively little undertaken by

SMEs. Given that over 90% of the region's businesses are SMEs, the challenge is

to increase their levels of innovation, as well as continuing the excellence within the

larger established businesses.

Research and development is a key input into the innovation process. In the East

Midlands, Gross Domestic Expenditure on R&D was equivalent to 2.3% of GVA in

2003, which is an improvement from 2.0% in 1998. Through improved focus we aim to increase this to 2.5% of GVA by 2005.

The composition of this R&D expenditure differs from the UK average: most notably levels of investment by Government and

Higher Education (HE) are lower in the East Midlands than the national average. Government R&D in the East Midlands is

equivalent to just 0.1% of GVA, which is half the national average. HE R&D in the East Midlands is also below the UK average

(at 0.4% compared to 0.5%).82

As the amount of R&D undertaken in our higher education sector is lower than the national average it is harder for the East Midlands

to attract additional R&D activities. Evidence from the Higher Education Funding Council for England indicates that each of the

region's 10 Higher Education Institutes receive less income for research than institutions in core cities such as Manchester, Leeds,

Birmingham and Sheffield. Furthermore, if we add together the total research funding for nine of our ten HEIs (excluding Nottingham

University) it is considerably less than the individual funding for the 12 highest funded institutions in the UK. Through increasing

collaborative work, East Midlands Higher Education Institutions could together achieve significant critical mass. It is vital that such

critical mass is developed, individually and collectively, to enable the region to be globally competitive.

3b. Helping existing businesses deploy technologies and processes

The diffusion of technology across the economy is driving new markets and products and accelerating changes in businessprocesses. Technology is enabling more efficient and flexible production in both manufacturing and services. The East Midlandscan only remain competitive by bringing to market or making use of the latest available technologies. The region, and themanufacturing sector in particular, needs to be able to adapt and avoid becoming 'locked in' to a path of relative (or even absolute)decline and generate new paths of economic development from within.

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Investment inresearch anddevelopment anddesign is positivelylinked to businessperformance.

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INCREASING RESEARCH AND DEVELOPMENTProvide targeted support to foster innovation within businesses and encourage them to undertake more researchand development with the aim of:� creating new market opportunities;� developing innovative new products, processes and services;� maximising the opportunities offered by existing support mechanisms (such as R&D tax credits) and improving

access to finance for R&D.

DEVELOPING RESEARCH EXCELLENCE� Develop research excellence so the region can compete for and benefit from a larger share of public and

privately funded R&D;� enhance the growth and investment in the region's research and science base, including the universities.

3a PRIORITY ACTIONS

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PICTURED: SILSON LTD, NORTHAMPTONSHIRE.

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PICTURED:

Above: Mixed RealityLaboratory at The Universityof Nottingham; left: IT servertechnician, Nottingham;below: The Richland GroupLtd, Nottingham.

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The region is already involved in the development of nanotechnology, fuel cells and low carbon technologies. Our capacity toexploit the intellectual property arising from these new technologies presents major opportunities. The East Midlands is well-placedin this respect with major companies such as Rolls-Royce and research institutions such as the genetics department at theUniversity of Leicester.83

Technology impacts on business performance. The productivity effects of Information and Communications Technology (ICT)investment are consistent across large and small firms making statistically significant returns across all industry sectors. A quarter ofEU GDP growth and 40% of productivity growth is attributed to ICT84 with its effects felt across all sectors with more than half of recentprocess innovations linked to ICT.85 However, management and leadership skills are critical to the successful implementation of thesetechnologies. American owned companies located in the UK tend to achieve greater returns on their ICT investment compared toEuropean owned firms, and this is largely attributed to their organisation and management approaches.86

Advances in technology are eroding the constraints of time and geography; people now live and work in a world where anyone cando anything, anytime and almost anywhere. But with over a third of East Midlands SMEs reporting that they have not adopted anysort of eBusiness technology or process, these benefits of technology have not yet been fully exploited.87 Through the provision ofbusiness support services, businesses that are helped to challenge the way they use technology today will be better prepared toachieve greater returns tomorrow. Lack of penetration of higher speed broadband into rural areas has particular implications forproductivity gains in rural areas.

Innovation East Midlands (InnEM) will identify as part of the region's Innovation Strategy, a number of cross-sector enablingtechnologies. These technologies will contribute to the development of all industrial sectors in the East Midlands economy. Thefollowing enabling technologies are strong candidates for inclusion:

Special attention will be given to the development of applications of enabling technologies in the priority sectors (listed on page 83).

3c. Resource efficiency through effective use of technology andmanagement practices

The creation and adoption of new technologies, processes and better management practices, like the effective use of design ofproducts and processes, produces clear benefits in terms of productivity, improving bottom line performance as well as providingwider environmental benefits.

Businesses in the region produce around 14 million tonnes of material waste each year and waste around one third of all the energythey buy. This has significant costs to the regional economy and to profitability. Recent national findings of the Environment Agencyshow that waste minimisation could yield almost a £3 billion saving in manufacturers' annual operating costs and that industry couldsave £1.8 billion through energy efficiency.88 These figures are only likely to continue to rise, bearing in mind recent increases in energyprices which are already impacting upon businesses in the East Midlands and the country as a whole.

Businesses that innovate to reduce their waste and become more efficient in the energy and resources they use are more competitive,profitable and productive. Businesses need to better understand the opportunities afforded by greater resource efficiency and be

� Environment and energy; � Advanced materials;� Global navigational satellite systems; � Micro and nanotechnology.� Digital technology;

DEVELOPING AND APPLYING NEW TECHNOLOGIES � Provide assistance in the development, promotion and implementation of new enabling technologies, products

and processes, utilising support services that are aligned with the needs of businesses;� establish collaborative networks between researchers, businesses, venture capitalists to ensure emerging

technologies are brought to market.

3b PRIORITY ACTIONS

supported in taking advantage of them. It is therefore essential that opportunities for improving resource efficiency and minimisingwaste are built into the mainstream communication, interaction and support for all our businesses. We must also utilise the high levelsof expertise in the region, from organisations such as the Centre for Sustainable Waste Management at the University of Northampton.

3d. Translating scientific excellence into business success

The East Midlands’ region has a proud tradition of scientific excellence and research breakthroughs including the development of

Magnetic Resonance Imaging (MRI) at The University of Nottingham, and Genetic

Fingerprinting at Leicester University. Indeed, the region has a history of linking

research with manufacturing innovation. However, much more can be done to

connect this impressive world-leading science base to the regional economy.

Science is applied to a very wide range of activities. For example, it is represented in

agriculture through improvements to growing crops, in manufacturing through

advanced technologies and in services through electronic commerce and can be

applied generally to innovation, diversification and alternative energy.

Cities are key drivers of economic growth. They act as pools of knowledge and attract highly skilled workers. Nottingham's

strengths have been recognised by its recent designation as a Science City. This is an opportunity for the City to build on its science

and technology heritage to benefit the conurbation and the wider region. The City's two universities spearhead Nottingham's

science base. Scientific excellence is also found outside the two universities; the City based Queens Medical Centre (QMC) is the

largest teaching hospital in Europe and the British Geological Survey (BGS), located just outside the City, is a world leader on earth

science information.89 BioCity is also an important innovation asset for the City.

Early plans for the development of Nottingham Science City include;

� engaging the wider community, particularly young people in science and technology based learning and careers;

� developing a property strategy, to ensure the right mix and availability of incubation and ‘growing on space’ for science andtechnology businesses;

� building international connections with cities with strong science bases;

� effectively exploiting resources, e.g. Framework Programme 7; the EU's main instrument for funding R&D.

The Times Higher Education Supplement world ranking of universities has The University of Nottingham ranked at 97th, the onlyuniversity from the East Midlands in the top 200. This is a relatively poor regional performance with all but one of the other Englishregions having a higher ranked university. Nevertheless, the East Midlands benefits from a strong and successful HE sector withnotable skills in key science, technological and creative areas. These must be developed and harnessed to underpin the economicgrowth of the region.

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The region has a history of linkingresearch withmanufacturinginnovation.

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PROVIDING BUSINESS SUPPORT ON RESOURCE EFFICIENCYIntroduce a range of resource efficiency business support measures that enable regional businesses to adoptleading best practice related to:� avoidance, reduction and improved management of waste;� creation of new markets for innovative products and services derived from waste;� more productive and efficient use of energy, water and materials;� promotion and implementation of environmental and sustainable benefits to businesses.

3c PRIORITY ACTIONS

Currently, the UK ranks high amongst the G8 in terms of the number of patents and citiations, which are considered as keyindicators of scientific (and innovation) excellence.90 However, the UK and the region distinctly lags behind many when it comes tosuccessful commercialisation of such excellence. The USA, Germany and France have stronger science and industry links leadingto greater commercialisation rates, measured for example in the number and type of licensing deals between universities andbusiness. The US 'innovation system' and the German Fraunhofer institutes provide the environment for successful exploitation ofscientific excellence. The Oxford to Cambridge Arc provides an opportunity for the East Midlands’ region to benefit from thesuccess seen in Oxford and Cambridge. This builds on the expertise of their universities and has a key role to play in stimulatingthe knowledge-led economy across the MKSM growth area.91

Data suggests that compared to the leading countries in Europe, relatively few UK companies cite co-operation with the sciencebase as an important way of accessing knowledge and advanced technology.92 All key institutions in the region must retain acollective focus and work together for continued scientific excellence and apply that for the benefit of the wider community in acontinuous cycle of innovation and improvement.

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MAXIMISING THE IMPACT OF SCIENCE CITY NOTTINGHAM Maximise the impact of Nottingham's Science City designation to the benefit of the wider region particularly inscience and technology focused infrastructure development and regeneration by:� encouraging greater and more effective collaborative working between the Nottingham Universities, other

research establishments and businesses to build the infrastructure, expertise and knowledge needed to attractand retain high value science and technology based businesses;

� extending outwards from Nottingham to develop regional research excellence.

COMMERCIALISING SCIENTIFIC EXCELLENCEIntroduce more effective initiatives to facilitate greater collaboration between businesses and the regional researchcommunity, including the universities, with the aim of:� matching research capability to business needs, leading to increased commercialisation of the region's

scientific excellence;� exploiting the benefits associated with wider intellectual property rights in order to develop innovative new

products and services and create new market opportunities;� providing specific business support throughout the commercialisation process.

DEVELOPMENT OF LAND AND PROPERTYDevelop land, property and facilities which maximise opportunities for collaborative innovation activities and inwardinvestment by providing quality sites and buildings which support enterprise development. Proposeddevelopments should: � be linked to RES priority sectors;� maximise clustering benefits;� improve links between academic institutions and businesses;� be supported by the work of Innovation East Midlands and blueprint;� encourage sustainable building design.

3d PRIORITY ACTIONS

Gross Domestic Expenditure on R&D(GERD).

% of businesses' turnover attributableto new & improved products.

To increase gross domestic expenditure on R&D to2.5% of GVA by 2009.

To increase the proportion of business turnoverattributable to new and improved products to 6%by 2009.

INDICATORS OF SUCCESS for Innovation

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PICTURED:

Top: Construction workat the Eagle CentreWestfield project inDerby; left: SouthgladeFood Park technologylaboratory; below:Dunston InnovationCentre, Chesterfield.

Growing the region'skey sectorsIndustrial restructuring is a long term process and the consequences can be severe, especially in areas dependent upon a small

number of industries. There are, however, also benefits such as more competitive businesses, greater choice for consumers and

lower prices. The East Midlands, along with others in the UK, continues to experience this restructuring, which has been driven by

both domestic policy (e.g. privatisation) and external factors (e.g. the development of manufacturing activities in low cost

developing economies).

Successive Regional Economic Strategies have had at their heart the need to transform the economy to ensure that the East

Midlands is globally competitive, increasingly based on knowledge and innovation and demonstrates adaptive capacity.93 To

achieve these aims we must enable key industrial sectors to reach their full potential and act as drivers of growth. This Strategy

identifies and provides a framework for public sector support for developing the region's key sectors. This support will involve emda

(including Innovation East Midlands and Business Link), Sub-Regional Strategic Partnerships (SSPs), the regional Learning and

Skills Councils (LSC) and the Skills for Business Network, UK Trade & Investment (UKTI), as well as other national, regional and

sub-regional partners with sector-targeted activities. There will also be a need to work closely with each sector to address specific

skill requirements. This will be developed alongside the work of the Employment, Skills and Productivity Partnership (esp). This will

especially involve the Skills for Business Network in response to sector skills agreements. Support provided will be specifically to

address market failures faced by businesses in those sectors and will be time limited.

There are strong linkages here with the Employment, Learning and Skills, Innovation and Enterprise and Business Support Strategic

Priorities. The links between innovation and skills are particularly important, as research suggests that a high level of workforce

skill and well developed knowledge and learning networks within sectors greatly increases the capacity to innovate and deploy

innovative products and processes.94

Priority sectors

The following four sectors are likely to make the greatest contribution to the East Midlands’ economy over the lifetime of the RES:

The four priority sectors were selected on the basis of a number of measures that identify sectors that:95

� perform strongly on productivity and /or have high quality jobs (in terms of higher wages reflecting a greater emphasis onworkforce skill);

� have good prospects for growth;

� have a significant presence in the region - in absolute terms and relative to the UK.

Analysis indicates that targeted interventions will have a greater impact in terms of closing the productivity gap that exists between

the East Midlands and the UK. By targeting these four sectors around £14 billion of additional GVA is generated. This compares

with an additional £11 billion of GVA if intervention was spread more thinly across a greater range of sectors in the economy. This

is detailed in the Economy and Productivity section of the RES Evidence Base.

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� Transport equipment; � Food & drink;

� Construction; � Healthcare.

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PICTURED: EPM TECHNOLOGY, DERBYSHIRE.

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Sector support

The priority sectors will require customised packages of specialist support to enable them to overcome barriers to growth and realise their

full potential; it is unlikely that generic business support alone is sufficient to achieve this.

Support will be directed towards an identified market failure or developmental bottleneck and will address both the shorter-term business

requirements and the medium to long term innovation and development needs of the identified sectors. Market failure should not be

confused with lack of demand in the marketplace. In terms of sector policy, examples are:

� uncertainty associated with rapid growth or technological change that may be deterring investment in the sector or impairing the

ability of businesses to respond quickly to a market need, e.g. meeting skills requirements;

� where a limited intervention can help a sector overcome co-ordination failures (i.e. the optimal outcome requires joint

working within the sector and there is no incentive for any one business to make that happen individually) e.g. networking

or establishing research centres; and

� where there is incomplete information to make judgements about the prioritisation of public sector resources, and a better

flow of information is needed between the sector and government, e.g. account management.

By targeting those sectors with the most significant market opportunities and removing developmental barriers to their growth, we will

be in a position to maximise the return on the public sector investment in terms of increased economic output in the East Midlands.

Previous strategies focused on clusters rather than sectors. This approach was based on the understanding that sectors that exhibited

clustering features were likely to make a greater contribution to the economic development of the region than those not demonstrating

these features. Within the new sector policy, clustering will continue to be encouraged where there is evidence that such an approach

will enhance the economic development potential of a priority sector by encouraging speedier innovation and increased

competitiveness. Only a limited number of sectors exhibit clustering at present, with aerospace and motorsport (part of the transport

equipment sector) identified as requiring ongoing cluster support.

Importantly, businesses in those sectors that are not identified as priorities will continue to qualify for generic business support through

the Integrated Business Support Network. Special measures for managing change may be needed where, for example, sectors are

facing restructuring and businesses need help to diversify into priority sectors, or where action is needed to minimise the impact on

local communities.

Some sub-sectors have particular significance at sub-regional level - e.g. high-performance sport in Loughborough, interactive leisure

software around Derby and Nottingham, and industrial design in Leicestershire. In some cases these niche sectors may benefit from

customised support provided by the relevant local agencies.

GROWING THE REGION'S KEY SECTORSEnsure that the priority sectors (transport equipment, construction, food and drink and healthcare) are consideredin the implementation of other actions in the RES to support growth, address skills needs and focus on efficiencyand excellence, for example:� by ensuring skills and training providers are matching their provision to the needs of these sectors; � by encouraging business support organisations to consider these sectors in the setting of their priorities and

delivery of their services.

3e PRIORITY ACTIONS

PICTURED:

Hill Holt Wood,environmental socialenterprise,Lincolnshire.

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Section eight

Structural theme 2

Ensuring sustainability

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AIM: Developing and enhancing the region's communities, and its assets ofphysical infrastructure and the natural environment to ensure theycontribute effectively to the region's productivity and economic wellbeing,both now, and into the future.

Context

Achieving the environmental goals set out in the Integrated Regional Strategy, protecting the environment, more efficient energy

and transport use, and investing in community assets all make economic sense. Efficient use of natural resources, energy and

transport, minimising waste and pollution, improving the built environment and protecting the natural environment can make

businesses more competitive. Alongside the broader sustainable development agenda outlined earlier, the ‘Ensuring Sustainability’

theme focuses on physical infrastructure, and environmental issues. These are key to delivering all the themes within the flourishing

region vision, ensuring the provision of more sustainable communities where people want to live and work.

Scale of the challenge

Infrastructure connectivity and a high quality environment matter to the economy.

Many businesses in the region stress the need for more to be done to improve our

transport infrastructure, and there is a demonstrable link between transport

accessibility improvements and economic growth. For example, in Nottingham the

NET tram project has connected deprived communities to job opportunities, and in

Corby, regional partners are working to reinstate rail services to support regeneration

of the local economy. It is equally important that we have the necessary housing and

infrastructure to serve the population of the region. Housing and the economy are

mutually dependent. Housing is not only a key sector itself, in terms of construction

and design for example, but also critical to the quality of life experience of people

living and working in the region. House prices in the region have risen considerably in recent years, rural house prices have risen

by 154% in the East Midlands between the first quarter of 1996 and the third quarter of 2003. This compares to a rise of 133% in

urban house prices over the same period in the region. Attractive and affordable housing creates communities where people want

to live and therefore where businesses want to invest. Good environmental practice through waste minimisation, greater energy and

water efficiency and improved environmental management practices will make the region both more competitive and attractive.

If the flourishing region vision is to be realised, the region needs to ensure efforts and resources address regional regeneration

priorities, as well as taking opportunities to support growth. In the context of both need and opportunity, this should include

maximising the potential assets and opportunities of our existing mature and growing urban areas, small urban areas and rural

communities, as well as the growth centred around the MKSM growth area.

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In Corby, regionalpartners are workingto reinstate railservices to supportregeneration of thelocal economy.

Ensuringsustainability

Place

The East Midlands as a ‘polycentric’ region consists of a large number of different-sized settlements and communities, from the

main urban areas of Derby, Leicester, Lincoln, Northampton and Nottingham, through to smaller market towns and villages. They

all have a role to play in supporting the region's economic growth and development and their respective offers should be enhanced

and supported.

Cities are key drivers of economic growth. ‘The Three Cities’ collaboration (Derby, Leicester and Nottingham) helps provide co-

ordinated action on some key strategic issues around economic competitiveness and complementarity; as well as connectivity

between the cities. An increasing awareness of the 'city-region' concept is helping develop cross-boundary working between local

authorities within and across the urban conurbations of the three individual cities. It also helps progress work relating to land supply

and economic development, and the ease of movement of goods and people within the wider conurbations. Action at the level of

the individual city or wider conurbation administrative areas remains key, including

provision of local services, skills and education, driving forward regeneration and

renewal, and implementing local transport improvements.

The region's unique spatial dimension throws up a number of opportunities and

challenges that need to be supported in promoting long-term sustainable and

balanced growth. Examples include; the Northamptonshire growth area (with planned

housing, infrastructure, and employment development), aspirations for higher levels

of growth within the Three Cities sub-area and in the north the continued revival of the

former coalfield areas. The Eastern sub-area provides a further series of challenges;

with Lincoln as an economic driver at the heart of a large rural county. Finally, the

region's many smaller towns and villages have an important and distinctive role to play in the overall development of the region.

Their businesses and communities have inherent growth potential to support sustainable and productive rural areas.

It is important that the contribution of our cities and primary urban areas to the region's economy is recognised and appropriately

supported. It is equally important, however, for the RES to provide the economic framework for individual area development plans or

strategies in order to ensure that all parts of the region have the opportunity to grow and benefit from their increased performance.

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The region's manysmaller townsand villages havean importantand distinctiverole to play.

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PICTURED: BRAYFORD WHARF, LINCOLN.

PICTURED:

The Skylink busnetwork toNottingham EastMidlands Airport.

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4

Transport andlogistics

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AIM: To improve the quality of regional infrastructure to enable betterconnectivity within and outside the region.

Transport and ICT infrastructure provide the links which enable the region's economy to function effectively, and allow it to grow. In

general terms, transport has a key role in helping regional and national economies function, and serves a catalytic role by providing

people with access to employment and educational opportunities, and businesses with access to both labour and markets. The

region has key assets such as Nottingham East Midlands Airport (NEMA), and a strategically advantageous location on national

strategic transport networks. We share boundaries with five other regions which provides access to and from markets, investment,

and opportunities in those regions in addition to our own indigenous growth. Therefore, our location and connectivity are key

strengths enabling us to achieve our economic objectives and aspirations. Transport and accessibility issues link directly to

objectives relating to increasing productivity, but also to sustainability and equality issues. The reliability and quality of links within

the East Midlands must be maintained and improved. Whilst 99% of the region's population now has access to broadband, further

steps are required to ensure the region can also respond to, and provide access to, next generation technologies.96

Infrastructure, accessibility and connectivity

Good regional infrastructure is a fundamental prerequisite for successful regional development.97 The quality and efficiency of the

region's transport infrastructure is essential to its attractiveness and success as a place to live, work and invest. It has an important

role in helping address or overcome peripherality or relative isolation from drivers of economic growth and opportunity, and

improved management of travel demand and behaviour relates directly to both the productivity and the environmental agendas.

Improved reliability and capacity of networks and public transport services can help improve local environments, the quality of life,

and community participation. Good transport connectivity and accessibility are seen

as a fundamental element and basis on which a successful regional economy, and

successful and sustainable communities, will flourish. This applies equally and poses

distinctive challenges in rural areas, in order to ensure vibrant economies and

communities.

Transport contributes directly towards economic growth, both in areas of growth, and

areas of regeneration need. Transport accessibility has been a key objective in efforts

to progress regeneration and economic growth and restructuring in the former

coalfield communities in the north of the East Midlands. By addressing the barrier of

poor accessibility and the need to improve reliability, transport schemes and

investment can help create new employment opportunities, and provide improved economic conditions and stability in the region.

Similarly, in areas of growth and opportunity, such as MKSM, the provision of infrastructure and transport services is key to ensure

more sustainable patterns of development.

Good regionalinfrastructure is afundamentalprerequisite forsuccessful regionaldevelopment.

The key surface routes that serve the region include:

� rail - the Midland, West Coast and East Coast main lines all provide high speed links to key destinations. Midland Mainlinewill soon provide integrated links with European networks via St Pancras in London;

� road - the M1, M69, A1, A14 and A42 are among the strategic road routes accessing the region.

East-west routes are generally poor compared to the north-south routes through the region. This has implications for thecompetitiveness of the region and means that the east of the region is relatively isolated from key centres of economic activity.Ensuring that main rail routes provide reliable and regular connections to London will continue to be a key priority, as will workingto improve and increase rail connectivity to other key locations in neighbouring regions, such as Leeds, Birmingham, andManchester, and important trade routes such as the Nuneaton to Felixstowe rail link. Regional partners will continue to work withtransport operators and Government to explore opportunities to address weaknesses or gaps in regional rail connectivity throughfor example, the Department for Transport's Transport Innovation Fund.

In addition to the relatively poor east-west links, there are significant behavioural challenges facing the region: for example, in thedecade up to 2003, the region saw the largest increase in road traffic of all the English regions. This has implications for theefficiency and reliability of the region's road networks, as well as performance against environmental objectives. The resultingcongestion imposes costs on the regional and national economy, but the success of the congestion charge in reducing traffic levelsin London shows that in certain circumstances public intervention can work to help reduce the negative impacts of congestion, andthat demand management schemes should be explored in the regions.

A strong message from the business community is that the reliability of journey time is often more of an issue than seeking to reducejourney time. Businesses and investors require a degree of certainty over how long journeys will take in order to be able to planand manage supply chains, to distribute goods and people, and to meet customer expectations and commitments. Uncertaintyover journey times requires them to plan for considerably longer journey times, andthis can impose additional costs. However, issues relating to reliability are not onlyrelevant to car and road travel. In terms of public transport journeys, the reliability andpredictability of the quality of service, as well as journey times are key elements inefforts to improve the competitiveness and use of public transport.

A key regional priority is working to achieve behavioural change to reduce reliance onthe car, and encourage use of public transport.98 This will require improvements to keyinterchanges and gateways, building on the masterplanning and accessibilityplanning activities currently underway. In addition to demand management andinnovative policies and approaches to reduce the demand for car travel, new andimproved infrastructure will also be needed. The Regional Funding Allocations advicefor the East Midlands has identified a number of transport priorities to 2016 which support regional economic and regenerationobjectives either by improving infrastructure of strategic significance, or supporting sub-regional growth and addressing thebarriers to access.99 The recommended package fully supports the RES, and includes key strategic schemes such as: the duallingof the A453 between the M1 and Nottingham; and the dualling of the A46 between Widmerpool and Newark which will help improveeast-west, and urban-rural connectivity. Schemes such as the improvements to the A1073 in Lincolnshire will help addressinfrastructural weaknesses and help improve cross-regional accessibility in support of important economic sectors. Other schemesdesigned to meet a range of sub-regional economic growth and regeneration objectives, such as the Markham Vale motorwayjunction (the Markham Employment Growth Zone), Mansfield Bus Station, the A43 Corby Link Road, and the Lincoln Eastern by-pass are also included and will help support a range of economic and physical development objectives.

A central location and the strategic routes that serve the region make it an attractive location for distribution activity, and parts of theregion have concentrations of logistics sector activity. Issues around employment land supply are covered in Strategic Priority 7.Freight movements are an important enabler that serve many sectors of the economy, and contribute directly to regionalproductivity. ‘The Regional Freight Strategy’ helps set out priorities, and actions to help realise regional objectives for improving theefficiency and reducing the impact of freight movements. Many of these objectives will be facilitated by improving strategic andlocal rail infrastructure and enhancing accessibility. A regional priority is to improve provision of inter-modal freight facilities and railgauge clearance for modern container traffic.

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A central locationand the strategicroutes that serve theregion make it anattractive location fordistribution activity.

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PICTURED:

Above: Workers atthe Port of Boston,Lincolnshire;left: Leicester TrainStation; below:East Midlands roadnetwork.

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PICTURED:

NottinghamEast MidlandsAirport.

In relation to freight movements, good road and rail connectivity to sea ports is vital to the region's economic competitiveness andsuccess. This includes major international ports in other regions, such as Felixstowe in the Eastern region, and the Humber ports,as well as smaller ports like Boston and Sutton Bridge in the East Midlands.

Nottingham East Midlands Airport

Regional airports impact directly on the economic competitiveness of locations served by them.100 The region has relatively good

air accessibility, well served by Nottingham East Midlands Airport (NEMA) within the region, and a number of others outside the

region which are used by people living and working in the East Midlands, including Robin Hood Doncaster Sheffield, Stansted,

Coventry and Birmingham International.

NEMA is the second largest international freight hub in the UK (after Heathrow), and the largest for the volume carried on dedicated

freight aircraft. NEMA serves as a national express freight hub specialising in the movement of high-value, low-weight items and so

serves many growth sectors of the economy including pharmaceuticals, IT, business services, and high-value engineering.101 The

express freight sector moves goods by a wide range of transport modes, with air movements only used to meet the needs of

businesses for express deliveries to a wide range of foreign destinations. The vast majority of goods moved by express freight air

are for business to business transactions. Therefore, in the context of international trade and competitiveness, the ongoing function

and success of NEMA, particularly as a strategic express freight hub, is important as it is one of the region's key economic assets.

In addition to direct employment which is forecast to continue to grow, the economic

benefits of airports include wider catalytic benefits such as support for inward

investment, international trade and tourism. Successful regional airports offering a

range of business and leisure services can help contribute to efforts to reduce the

need for surface travel and reduce congestion and road mileage by removing the

need for East Midlands’ residents and business to undertake longer surface journeys

to access air services.

The Government's Aviation White Paper (December 2003) supports the growth of

NEMA with passenger and freight traffic, and acknowledges its national role for freight

operations. However, the growth of NEMA will require improvements to surface

access, especially by public transport, to maximise the benefits of that growth,

enabling workers to access employment and training opportunities at NEMA.

Improving surface access to airports, especially by public transport, will remain a key

regional priority to help realise these benefits over the longer term, particularly where

improvements help regional workers access employment and training opportunities at airports. At NEMA the development of the

planned Parkway Station is a priority to improve public transport accessibility for passengers and employees and a long-term

regional aspiration is for a fixed public transport link to NEMA.

As part of the NEMA's continued growth, the opportunity for non-operational airport related activities to be developed off-site, within

the broader Three Cities sub-area will reduce the need for employees from urban areas to travel to the Airport site.

Whilst working to maximise the benefits of the expansion of NEMA, there also needs to be a comprehensive package of measures

to help reduce and mitigate the environmental impacts associated with this forecast growth. The NEMA Masterplan, due for

publication later in 2006, will be key in this regard and in helping inform local and regional plans and strategies.

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NEMA is thesecond largestinternational freighthub in the UK (afterHeathrow), and thelargest for thevolume carried ondedicated freightaircraft.

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PICTURED: CENTRE FOR TECHNOLOGY EXCELLENCE, EDWINSTOWE, NOTTINGHAMSHIRE.

ICT Infrastructure

The provision and use of ICT infrastructure will be critical to improving the productivity of business and the future competitivenessof the region, but is regularly excluded from the early phases of planning developments and regeneration projects. An affordable,entry level broadband is available to over 99% of the East Midlands’ population, but to remain competitive the public and privatesectors need to plan for investment in next generation technologies and infrastructure. All new build projects should consider theICT connectivity needs as part of the design process as installing civil infrastructure after the construction of a building could beup to ten times more costly than during the build.

In rural areas, ongoing investment will be required, especially in the more remote areas which are in danger of being excluded fromthe benefits of the higher speed 'new generation' ICT connections. These connections could offer significant potential fore-business in otherwise isolated locations, and help reduce the disadvantages of remoteness in the drive for increased economicproductivity. ICT connectivity will also have a role to play in helping reduce the need to travel within the broader context of thebehavioural change agenda.

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% of workforce travelling to work bypublic transport, walking or cycling.

To increase the proportion of the East Midlands’workforce travelling to work by public transport,walking or cycling to 23% by 2009.

INDICATORS OF SUCCESS for Transport and Logistics

IMPROVE TRANSPORT CONNECTIVITY AND ACCESSIBILITY To maximise the contribution the region's transport infrastructure and services make to the delivery of the RESobjectives, the following actions will be promoted by regional partners to be taken through national agencies, RSSand RTS, Local Transport Plans and Development Frameworks, and transport operators:� improve inter and intra-regional connectivity by strengthening links between the region’s main urban centres,

improving reliability on key routes for passengers and freight, and address poor connectivity or capacity to keycentres in other regions, including London, Leeds, Birmingham, and Manchester;

� improve international accessibility by improving surface access to NEMA and other airports serving the region(including Robin Hood Doncaster Sheffield), and strengthening connectivity to mainland Europe by a range ofmodes, including rail via London;

� support regional regeneration and growth by improving access from all communities to employment andmaximising the impacts of economic drivers and growth areas, unlocking investment sites in disadvantagedcommunities, and addressing inequality by improving accessibility;

� contribute to environmental, quality of life, and wellbeing indicators by implementing demand managementmeasures, and access to recreation, sport, and cultural facilities.

MAXIMISE BENEFITS OF NOTTINGHAM EAST MIDLANDS AIRPORT, AND ROBINHOOD AIRPORT Realise the economic opportunities and benefits of NEMA and Robin Hood Airport. This includes recognising theneed to address and monitor key environmental issues to help secure long-term sustainable growth. Key issues foraction by local, regional and national partners are:� surface access improvements to reduce the local impact of transport movements, and enable all communities

to access employment and training opportunities; � secure employment land supply in local urban areas through local development frameworks and strategies;� ongoing partnership working to ensure skills, labour supply, and training opportunities help meet future Airport

needs through groups like the NEMA Employers Forum;� ongoing mitigation and technological responses to help reduce local noise and wider environmental impacts

of the forecast growth in passenger and freight activity.

TRAVEL DEMAND MANAGEMENTSupport regional competitiveness by improving transport efficiency and reducing road congestion bydeveloping innovative approaches to behavioural change, travel demand management, and integration,including exploring measures of congestion charging and measures to realise economic, wellbeing andenvironmental benefits.

4 PRIORITY ACTIONS

PICTURED:

Award-winningSherwood EnergyVillage in Ollerton,Nottinghamshire.

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5

AIM: To transform the way we use resources and use and generate energyto ensure a sustainable economy, a high quality environment and lessen theimpact on climate change.

The challenge of global climate change requires that we make profound improvements to the way that we use our natural resources,across all sectors and activities including business, construction, households and transport. Making the transition to a moreresource efficient and low carbon led economy represents a huge challenge for consumers and producers. At the same time itoffers a significant economic opportunity for the region in terms of productivity savings, new market opportunities and increasedeconomic resilience.

The aim of a low carbon economy is to have cleaner, more efficient production processes which strengthen competitiveness. It willproduce better designed products and buildings that reduce environmental impacts from energy and materials usage, and shiftconsumption patterns towards goods and services with lower environmental impacts. It will manage and mitigate the necessaryevolution of indigenous and traditional energy sources, industries and distribution systems by exploiting new and emergingtechnologies and innovation. It will create new businesses and employment, be less reliant on fossil fuel energy for wealth creationand wellbeing and deliver more efficient, less wasteful businesses with high levels of productivity.

A key element of the approach required is to reduce the demand for energy and resources - particularly challenging in a growingeconomy. This requirement for a change in awareness and behaviour is covered within the Innovation section.

5a. Responding to the challenge of climate change

Prioritised by the Government as ‘the most severe problem we are facing today’,102 we must address the causes of climate changeand be prepared for the consequences and ensure that the region is well positioned to benefit from the new economic opportunitieswhich will emerge.

There will always be uncertainty in understanding a system as complex as the world's climate.103 However, there is now near universalevidence that significant global warming is occurring and that most of the warming in recent decades can be attributed to humanactivities. As economic activities both impact and rely upon a well functioning climate it is critical that the East Midlands responds tothis global challenge by reducing our impact and preparing for the consequences of change.104

Climate change is largely caused by the level of carbon dioxide in the atmosphere which pushes up temperatures and subsequentlyleads to higher sea levels. Research undertaken by the Association of British Insurers confirms that climate change is also increasingthe regularity and intensity of extreme weather conditions with resultant costs to the economy in terms of the effects of floods, thesubsidence of buildings, increased insurance premiums, etc.105

Further, average annual temperatures across the UK could increase by between 2 and 3.5°C by the end of the 21st century.Temperature increases could result in the need for higher refrigeration and air-conditioning costs and impact upon the region'sagriculture and forestry sectors.106

The implications for the regional economy are wide and varied. We need to ensure that we fully understand the nature of theseimplications across all aspects of our economy and identify where and how we mitigate against change, adapt to new circumstancesand exploit new opportunities.

Energy andresources

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5b. Exploitation of new and growing low carbon markets

Accessing the increasingly carbon-sensitive global market place is essential for the region to reach its growth aspirations. Theregion has significant strengths to enable exploitation of the growing market place for low carbon technologies. It has a strongenergy sector heritage which offers cutting edge research in both universities and business, and the strong internationalconnections these provide need to be supported and capitalised upon.

The cutting edge technologies, such as fuel cells, that are some years away from being commonplace, will require extensiveenabling and transitional technologies to surround them and pave the way for their acceptance. This provides another clearstrength that the region will be able to support and build upon. Our universities collectively boast research and teaching capabilitieswithin the low carbon agenda that are respected worldwide, especially at the universities of Loughborough, Nottingham andNorthampton. To develop our market lead further we must improve links between industry and the region's universities, and supportthe commercialisation of low carbon technologies, processes and services.

Businesses that adapt to and address the aspirations of the market and ultimately of consumers will benefit from a distinctadvantage. Investors are already becoming carbon risk averse, while disclosure of environmental and climate change relatedliabilities to shareholders are increasingly required.

Therefore businesses that have embraced the realisation that there are limits to the carrying capacity of the environment to sustainour activities will offer a clear and distinct selling message above their competitors and minimise their liabilities againstenvironmental, social and pollution regulations and gain access to the growing demands of consumers and markets for moresustainable goods and services. This global marketplace is expected to reach £440 billion per year by 2010.107

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ADAPTATION TO CLIMATE CHANGE Ensure that public and private sector leaders understand and respond to the impacts of climate change by:� developing a regional climate change adaptation and mitigation strategy/action plan;� providing support to businesses to undertake climate change risk analysis.

REDUCING THE DEMAND FOR ENERGY AND RESOURCESEnsure that our need for energy and resources is minimised by:� investing in better management and skills;� driving change through public procurement;� encouraging use of low carbon technologies;� stimulating clean design.

5a PRIORITY ACTIONS

UTILISING RENEWABLE ENERGY TECHNOLOGIESMaximise the economic and environmental benefits of renewable energy technologies by promoting theirdevelopment and deployment through:� the creation of a regional renewables investment plan;� promote demand for and showcase renewables technologies;� support supply chain development to ensure regional economic benefit from renewables investments.

EXPLOITING LOW CARBON TECHNOLOGIES Ensure that businesses are well placed to exploit the opportunities presented by the growing global marketplacefor low carbon products and services through:� regional awareness raising and communications campaign;� the provision of dedicated low carbon business support;� creating stronger linkages between the private sector and Higher Education Institutions active in low carbon

research and development.

5b PRIORITY ACTIONS

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PICTURED: INLAND REVENUE SUSTAINABLE BUILDING DESIGN IN NOTTINGHAM.

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PICTURED: BROCKS HILL VISITOR CENTRE AND COUNTRY PARK, LEICESTERSHIRE.

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5c. Ensuring an infrastructure for a low carbon economy

Stable, secure, reliable and equitable systems of energy and environmental support systems (such as energy, waste and waterservices) must be achieved to enable a sustainable regional economy.

The region's energy infrastructure is in a transitional period; large coal-fired generating capacity faces a foreshortened operationallifetime and forced significant capital investment; electricity distribution networks, cables and pylons are close to the end of theirdesign life and wholesale refurbishment and renewal is required; lack of storage facilities for imported gas (already underconsiderable global supply pressures) for power generation and heat may lead to restrictions at times of high demand.

The region's existing capacity for waste disposal will be exhausted within 10 yearseven if all current waste reduction targets are met.108 The waste infrastructure istherefore similarly at the threshold of transition - demanding extensive investment,and a need for innovation and future-proofing. It is essential that investment,development, growth and innovation in these systems support the requirements of oureconomy in a way that assists in the low carbon transition. Power generation willbenefit from being smaller and more localised, providing heat as well as powerservices and using diversity of technologies and fuels, and being far less reliant onfossil fuels. Distribution of power will need to be far more reactive, allowing two-waytransmission and managing more variable inputs from generation. It will enable fargreater scope for security and reliability, and offer opportunities for ownership withinthe region - capturing energy spend within the regional economy - as well asstrengthening parts of the region, specifically rural areas.

The region's existingcapacity for wastedisposal will beexhausted within 10years even if all currentwaste reductiontargets are met.

ENERGY AND WASTE CAPACITYPromote the development of a more secure, diverse and sustainable energy and waste infrastructure and innovativeapproaches to providing energy and waste services within our economy by:� promoting and investing in renewable and low carbon energy generation;� promoting and investing in diverse and localised energy supply;� promoting and investing in diverse and localised waste management;� influencing private sector utilities and regulators concerning the capacity and longevity of existing supply and

distribution and waste management infrastructure.

5c PRIORITY ACTIONS

Carbon dioxide emissions by end userper £ million GVA.

Waste produced per £ million GVA.

To move towards the national average in total CO2

emitted per £ million GVA produced by 2009.

To move towards the national average in total wasteproduced per £ million GVA by 2009.

INDICATORS OF SUCCESS for Energy and Resources

PICTURED:

Conkers VisitorCentre, developedon the site of theold RawdonColliery.

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6

AIM: To protect and enhance the region's environment through sustainableeconomic growth.

Introduction

The environment is best described as a series of interdependent natural systems which host our society and economy. How wemanage, respond to, and impact upon these natural systems has implications for the sustainability of our economy, our socialstructures and the environment itself. It is therefore, a critical part of the region's infrastructure. The environment provides essentialgoods and services that support our quality of life and our economic activities. It provides for our leisure and tourism needs,contributes to our wellbeing, enjoyment and health, and fulfils the basic human needs we rely on for our survival. The UKSustainable Development Strategy states that we must regard the local environment as a major public service (like the NHS oreducation) which benefits us everyday.109

We can categorise the environment in terms of: environmental infrastructure; and green infrastructure. Environmental infrastructurerelates to the infrastructure upon which our economy and wider lifestyles directly rely to function.

Green infrastructure is a part of the wider environmental infrastructure and is concerned with the region's network of multi-functionalgreen spaces which contribute to a high quality natural and built environment and our quality of life and wellbeing.110 It includes ourbiodiversity, open spaces, landscape character, water courses and waterways, air quality and natural heritage.

Environmental infrastructure provides the space and capacity for our homes, businesses, transport and other infrastructure (includinggreen infrastructure); it contains minerals, water and other raw materials and resources which we extract, consume and to which weadd value to support human activity, provide goods and services and create economicwealth; it provides a sink in which waste materials are stored, discharged, diluted ortreated rendering them harmless or reducing the risk to people.

The effects of unsustainable economic growth have increasingly led to thedegradation, and in some cases irreversible loss, of our green and environmentalinfrastructures, such as habitats and biodiversity; the depletion of resources beyondthe environment's natural capacity to replenish them (for instance the over-extractionof water resources); and to loading beyond the carrying capacity of natural sinks anddilution systems (air quality and climate change issues). The relative low price of theresources provided by our environmental infrastructure has meant that we have notsought to make the best use of our existing built infrastructure and extractedmaterials. As such, an important part of reducing the pressures on our environmental infrastructure will be to deliver a step changein how we maintain, repair and extend the life of our existing, built infrastructure.

The region needs to achieve economic growth, but not growth at any cost. Sustainable economic growth seeks to protect andenhance our green and environmental infrastructures; and minimise negative impacts whilst finding mechanisms to compensatefor damage or depletion. In this way we can realise sustainable economic growth that neither diminishes our wellbeing nor, throughdamage, limits our potential for growth in the future and contributes to the realisation of a flourishing region.

Environmentalprotection

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The environmentprovides essentialgoods and services that support our quality of life and our economic activities.

6a. Protecting and enhancing our environmental infrastructure toensure sustainable economic growth

Our economy and key industrial sectors are directly dependent upon a well-functioning environmental infrastructure (resources, sinksand services), which are inseparable from our economic infrastructure (transport, power, buildings, etc).111 The UK SustainableDevelopment Strategy illustrates that our economy needs to acknowledge the carryingcapacity and, therefore, the physical limits of our environmental infrastructure. There isscientific consensus that to continue with over-consumption patterns that disregardthese limits will continue to degrade the very systems we rely upon, inhibit economicgrowth potential and affect our wellbeing.

Anticipating and adapting to the challenges facing our environmental infrastructuremakes good business sense: reducing costs, liabilities and increasing productivitywhilst opening up new markets and opportunities for wealth creation. Consequently,resource productivity (as described in the Raising Productivity Theme) is an essentialelement to our response to these issues.

As well as the efficient management of resource inputs, further priority actions listed within Strategic Priority 5 and StrategicPriority 6 allow us to decouple economic growth from environmental degradation whilst enhancing the sustainability of ourenvironmental infrastructure.

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Anticipating andadapting to thechallenges facing ourenvironmentalinfrastructure makesgood business sense.

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ENVIRONMENTAL INFRASTRUCTUREDevelop and promote innovative and sustainable approaches to supply and demand management (relating to travel,energy, water and materials) to reduce pressures on environmental infrastructure by:� improving resource efficiency (see priority action 3c);� addressing travel demand management (see priority action 4a-3);� delivering sustainable energy and resource management (see all the actions under the Energy and

Resources section).

SUSTAINABLE CONSTRUCTIONEnsure that investments in the built environment integrate climate change considerations through:� raising awareness of climate change factors on the built environment (see priority action 5a under the Energy and

Resources section);� applying high quality design and environmental standards for all developments (refurbishments and new builds)

receiving public sector support;� promoting and replicating models of leading construction best practice, such as Sherwood Energy Village and

Attenborough Nature Reserve.

CLEANER PRODUCTION PROCESSESSupport the development and adoption of cleaner production processes and shift consumption towards goods andservices with lower environmental impacts through:� assisting businesses with the provision of clean production process audits;� building links between the region's Higher Education Institutions and businesses.

6a PRIORITY ACTIONS

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PICTURED: ATTENBOROUGH NATURE RESERVE AND VISITOR CENTRE, NOTTINGHAMSHIRE.

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PICTURED: WIND TURBINE AT BROCKS HILL VISITOR CENTRE AND COUNTRY PARK, LEICESTERSHIRE.

6b. Protecting and enhancing green infrastructure throughenvironmental stewardship

The concept of ‘green infrastructure’ elevates land (and its associated water and air environments) to an equal footing with built

infrastructure and transforms open space from ‘nice to have’ to ‘must have’ as an integral part of new developments. Green

infrastructure helps frame the most efficient and attractive location for development and growth in the context of sustainable

development. It also helps address inequalities of health and quality of life issues

particularly in more deprived communities. Green infrastructure embeds our need for

a high quality environment into the planning context, helping to identify what must be

protected, what can be enhanced and created and, therefore, where and how it is

appropriate to avoid, mitigate and compensate for damage.

Consequently, a healthy and robust green infrastructure underpins a truly successful

economy. The East Midlands’ tourism industry, for example, depends on a high

quality environment and supports approximately 40,000 environmental tourism

related jobs. Equally, environment sensitive farming and forestry practices sustain

approximately 4,300 land-based jobs in the region.

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...a healthy androbust greeninfrastructureunderpins a trulysuccessfuleconomy.

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IMPROVE DAMAGED ENVIRONMENTS � improve natural environments, damaged as a legacy of former industrial and development activity particularly

where this is a barrier to investment in the region, especially in the coalfields;� encourage sustainable agriculture which enhances and protects the countryside and protects the region's

biodiversity.

PROTECT AND ENHANCE GREEN INFRASTRUCTUREProtect and enhance green infrastructure at the local and regional levels to contribute to more sustainablecommunities and enhance quality of life by:� encouraging the integration of green infrastructure issues into the planning system, where possible;� working with developers and land owners to ensure that opportunities for new or improved green infrastructure are

integrated into physical development schemes;� realise the environmental, social and economic potential of green infrastructure.

6b PRIORITY ACTIONS

Proportion of river distance classifiedas 'good' chemical and 'good'biological quality.

To maintain current proportion of East Midlands’ riverlength (% of total km) of 'good' chemical and 'good'biological quality up to 2009.

INDICATORS OF SUCCESS for Environmental Protection

PICTURED:

Pride Park, Derby,developed onbrownfield land.

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7

AIM: To ensure that the quality and supply of development land, and thebalance between competing land uses, contributes towards the sustainablegrowth of the regional economy.

7a. Development

The Regional Spatial Strategy (RSS) provides the long-term spatial planning framework for the region and includes the RegionalTransport Strategy (RTS). The RSS is prepared by the Regional Assembly in consultation with the region, and is approved byGovernment. The RES and RSS have a direct relationship and together provide the context for economic and spatial developmentin the region. While the RSS focuses on spatial and land-use related issues the RES provides the policy context for economic issuesas they relate to development and regeneration. To help strengthen this relationship and provide alignment and consistency theproposed RSS spatial sub-areas are used to provide spatial definition.

Physical development has a key role to play in helping to create a flourishing region, and the creation of sustainable communities.To help contribute to these objectives, development proposals and decisions should have regard to the ‘development principles’which ensure that development is brought forward in an effective and sustainable manner, helping to deliver the region'saspirations. These can be found in Annex B.

7b. Development land

An appropriate quality supply of development land is one of the fundamental requirements of a competitive regional economy,enabling the region to provide the type and quality of development required to attract and retain employers and a quality workforce.

Restructuring of development land

As the regional economy continues to restructure, the requirement for development land is changing. There will be a significantdecline in demand for industrial floor space and a significant increase in demand for office floor space over the next 10 to 15years.112 This restructuring towards office based and service sector focused employment has implications for the allocation and useof employment land and the nature of new supply. Due to the higher density of employment in the service sector compared toindustrial or manufacturing, less land will be required than that needed historically, but it remains essential that an appropriatesupply of land is available in locations to help meet economic and other growth objectives. Despite the restructuring and overalldecline, manufacturing remains an important sector to the East Midlands region.113 Between 2000 and 2004 the number of factoryunits was fairly constant but the amount of floor space occupied declined. There has been an increase in the amount of floor spaceoccupied by offices and retail units.

Processes of economic change have also impacted on rural areas. The availability of land and premises to new, expanding andincoming businesses in rural areas is perhaps the most serious barrier to growth that rural businesses face.114 Ensuring anappropriate supply of employment land and premises (including allowing appropriate conversions of redundant buildings) inmarket towns, villages, farms or other rural locations is essential not only to ensure that these communities remain economicallysustainable, but also to enable the rural areas as a whole to play their full part in contributing to regional economic growth. This isalso key to reducing the need to travel to larger urban areas from more remote rural communities.

Land anddevelopment

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While the broad picture and trends relating to employment land are understood, the sub-regional pattern of office and industrial

floor space supply and demand is more complex. In some parts of the region the supply of office and industrial space is

constrained while in other areas the supply outstrips demand. Issues of quality are relevant across the region, and are at the heart

of the regional approach in both the RSS and RES. At both a regional and sub-regional level, considerable amounts of work are

being done to fully understand and respond to the different characteristics and dynamics of employment land supply and demand.

For example, work being done by Local Authorities and SSPs, much of it building on the Regional Employment Land Priorities Study

(RELPS) and the Quality of Employment Land Study (QUELS), is helping inform local and regional policies and land allocations.

Previously developed land and buildings

Derelict areas, abandoned buildings and rundown places are sights that blight our cities, towns and the countryside. There iscurrently a total of 64,130 hectares of previously developed land across England, identified by the National Land Use Database asat March 2004 and 9% of this national figure lies within the East Midlands.115

The objective is to accelerate the pace of the re-use of brownfield land to further the strategic development opportunities of thearea under consideration.

One of the largest single origins of brownfield land is the colliery closure programme. Work will continue in the region on bringingformer colliery sites back into beneficial use through the National Coalfields Programme. The work at each of the sites in the EastMidlands includes remediation of contamination, reclamation and redevelopment for a range of end uses including housing,employment, recreation and greening. A notable success has been the development of the Sherwood Energy Village at the formerOllerton Colliery Site, which won the coveted ‘Enterprising Britain Competition’ in February 2005. The work aims to reflect BestPractice with regard to sustainability; design quality; employment; and training of the local workforce and forging relationships withlocal communities.

Supply issues

Some identified sites are unattractive or non-viable, and the policy of deallocating such sites should continue, unless there are

realistic opportunities for improvement through public and/or private intervention. Local Development Frameworks should ensure

an appropriate supply and range of quality employment sites, and for a range of different types of accommodation. For example,

ensuring a supply of ‘easy-in easy-out’ accommodation or ‘follow on’ accommodation for small, established but growing

businesses to continue their development is as essential as sites to help attract inward investment.

In areas of high growth, such as the MKSM growth area focused in and around urban areas in Northamptonshire, the supply of

appropriate sites to provide a balance of land-uses is essential. Of equal importance is the provision of appropriate infrastructure

to ensure that growth helps deliver sustainable communities and contributes towards the regional economy.

In addition to issues such as transport accessibility, environmental characteristics, and proximity to a skilled workforce, utility and

ICT connectivity are a key part of ensuring a quality supply of land. The private sector alone is often not prepared or able to invest

in full ICT connectivity of sites or communities outside urban areas which can further reduce attractiveness or viability, and add to

issues of peripherality. The provision of appropriate infrastructure, including ICT connectivity, to serve new and redeveloped

employment sites is therefore essential to deliver attractive and viable development opportunities. Initiatives such as the new

'blueprint' regional public-private partnership will acquire or develop sites in the region to support regeneration, and stimulate

private sector activity.

Location of development

Ensuring appropriate quality and quantity of land supply for development is of most importance in the main urban centres. Inaddition to their economic role, the planning system sees urban areas as the most sustainable location for new development, andseeks to develop brownfield (previously developed) sites, before greenfield. However, evidence of recent trends indicates that moreemployment land has been developed on greenfield sites than on brownfield sites. In part this may be due to the strong housingled policy agenda which has seen many former employment sites in urban areas redeveloped for residential development.

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PICTURED:

Above: Brook Park inShirebrook is anongoing developmentproject on the formerShirebrook Colliery;left: Sherwood EnergyVillage wasdeveloped on aformer colliery site.

In 2003/04 the region saw over 58% of all new houses built on brownfield land, but in some urban areas within the region thesefigures were considerably higher - for example in Nottingham and Leicester the proportions were 94.8% and 72.2% respectively.While this has benefits in terms of urban regeneration and the re-use of derelict land, it has implications for the patterns ofdevelopment as the focus on urban brownfield sites for residential development is forcing increasing amounts of employmentdevelopment to more peripheral greenfield locations. In 2003/04 the region had committed over 3,000 hectares of land foremployment purposes and just over two thirds of the commitments were on greenfield sites.116 Greenfield development maysometimes be necessary, particularly in rural areas, but where this is the case, the impact on the environment must be minimised.

While more peripheral greenfield locations appeal to many developers and employers, regional and local land use policies needto consider issues such as the potential for harm to biodiversity in the region, the provision of supporting infrastructure and thepotential for increasing the need to travel if employment activity is increasingly located on the periphery. Indeed, some greenfieldlocations might be located in more sustainable locations than brownfield sites. Ensuring appropriate mixes of use is key toeconomically viable and sustainable communities, and in reducing the need to travel. The regional application of a sequentialapproach to all development through the ‘Regional Spatial Strategy’ should mean there is a continuing supply of 'central' or urbanemployment land to support economic development and regeneration of urban areas, and consideration should be given to theprotection of local high quality urban employment sites from pressure for other uses.

However, the urban focus of the sequential policies should not only relate to large urban areas. It is also important to ensure asufficient supply of a range of serviced sites and premises in the rural areas to enable new businesses to establish and existingones to expand to help ensure the continued success and viability of market towns and rural communities. This will support theRES objectives of raising productivity and achieving equality, and will help reduce the need to travel to access employment andother services.

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SECURE THE QUALITY AND SUPPLY OF EMPLOYMENT SITESEnsuring and safeguarding an appropriate supply of quality employment land by providing supportive local andregional plans and policies. Key actions include:� maintaining an up to date regional picture of employment land supply and quality issues by monitoring, and

building on the results of local, sub-regional, and regional studies;� bringing forward new sites, upgrading existing sites, and where necessary in order to further regeneration

objectives, promoting the redevelopment of commercially unattractive sites for other economically beneficial uses;� undertaking master planning exercises, and where appropriate use Environmental Impact Assessments (EIA),

to provide an holistic approach to the supply of employment land;� preparing relocation strategies for businesses affected by redevelopment proposals;� encouraging job creation through private sector development and the targeting of public sector resources for

priority sites.

INFRASTRUCTURE FOR EMPLOYMENT-RELATED SCHEMESEnsure appropriate levels of infrastructure including transport, utilities and ICT for employment-related schemes, through:� assessing regional deficiencies and identifying needs for utility provision and ICT; � assessing and planning for infrastructure needs on proposed sites for development, using development briefs

and local planning decisions to ensure appropriate provision;� ensuring proactive investment by the public sector where market failures exist;� assess potential environmental impacts using Environmental Impact Assessments (EIA) and environmental

capacity studies

PREVIOUSLY DEVELOPED LAND AND BUILDINGS� Increase the re-use of previously developed land through an appropriate mix of actions including site

remediation, reclamation and redevelopment, and ensure that effective use is made of the existing stock ofbuildings. Key actions include:

� rolling out the Brownfield Land Action Plan for the East Midlands;� identifying appropriate previously used sites through Local Development Frameworks to bring forward

economic investment consistent with the RES and RSS;� ensuring that the legacy of severe problems of environmental degradation caused by coal mining continues to

be addressed.

7b PRIORITY ACTIONS

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PICTURED: SHERWOOD ENERGY VILLAGE, OLLERTON, NOTTINGHAMSHIRE.

7c. Housing

The supply, quality and types of housing available in the region are a fundamental feature of the regional infrastructure, and in thisway housing and the economy are closely linked. Regional economic competitiveness is affected by a range of componentelements, and housing is one of them.117 An appropriate mix and quality of housing choice across public and private sectors is anessential aspect of creating a flourishing region. The 'growth areas' within the Department for Communities and Local Government(DCLG) Sustainable Communities Plan are intended to help tackle issues relating to housing supply and affordability whichconstrain economic growth and so help demonstrate the importance of these links. In areas affected by low demand for housing,projects are being funded by the regional Housing Board in Derby, Mansfield and Bolsover to test out a housing market renewalpolicy framework which will tackle both housing and regeneration issues.

Lack of balance between housing and job markets can lead to increased commuting and congestion, which also impact oneconomic growth and performance. The relationship and alignment between regional economic objectives, the RSS, and LocalPlans and Development Frameworks is key in this regard, as are the masterplans of the URCs and other partners. The opportunityfor people to live near to their place of work, social or cultural opportunities and services, and be well connected to the region'stransport networks is vital if we are to create sustainable communities where people want to live and work, now and in the future.Mixed use schemes need to integrate housing as part of a balanced approach to future land use within the overall mix ofemployment opportunities to ensure longer term sustainability. 'City flight' has been identified as a key concern for many urbanareas, including the Three Cities and it is likely that this pattern is not solely related to the quality and mix of housing but is due toa range of quality of life factors such as services, quality of education, crime levels and environmental quality. It also highlights theneed to improve the built environment of towns and cities through high quality design more generally.

Issues of affordability and quality of housing, in both public and private sectors, are key to securing attractive communities in theregion over the long term. ‘The Regional Housing Strategy’ has identified that in many areas of the region, such as the Peak District,parts of Northamptonshire and Lincolnshire, and parts of many urban areas, affordability is an increasing problem.

There are sections of the population who are disadvantaged or vulnerable due to a range of factors, particularly in low demandareas, including low income, ethnic group, age or poor health which may mean they have little or no choice in terms of housingprovision and location. In order to address social exclusion and issues of equality, the housing needs of these diverse groups needto be addressed in combination with improved access to a range of other services such as education, health, employment, learningand skills opportunities, and childcare support.

The provision of new housing in the growth areas and increased levels of Government investment for both affordable housing and theimprovement of older housing stock are placing considerable pressure on the skills capacity of the construction industry. Regionalpartners need to work together to support innovative solutions to the skills gaps identified, promote the use of local labour in construction,increase the number of women, minority groups and other under-represented groups in the industry and share good practice.

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SUPPORTING INFRASTRUCTURE FOR HOUSING GROWTHIn areas of housing growth, ensure provision of transport, economic, cultural, and community infrastructure, includinggreen infrastructure, to support the creation of sustainable and integrated communities. This will be achieved by:� using development briefs and planning policies and decisions to ensure provision of adequate land supply for

employment and community uses to support housing growth;� assessing and addressing the deficiencies and needs for utility provision to service the new development.

REGENERATION IN AREAS OF LOW HOUSING DEMAND Ensure that regeneration and economic, social and environmental inclusion benefits are integral to future developments inareas of low housing demand through the provision of new and improved housing and community and economicinfrastructure. Key actions are:� build on the experience of ongoing best practice, such as Meden Valley Making Places, and support the Housing

Market Renewal pilot projects which will test out the Regional Policy Framework for housing market renewal;� develop a greater understanding of both the causes and the solutions to housing market failure in the region and

address them through regional and local investment strategies.

RANGE OF HOUSING PROVISIONImprove the range, mix and quality of housing in the region, including the renewal of existing housing stock, through theRegional Housing Investment Strategy, through regional and local planning policies, and development control decisions.

7c PRIORITY ACTIONS

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Average annual growth rate over afive year period in employment floorspace.

To maintain an average annual growth rate over a fiveyear period of 1.5% in employment floor space by2009.

INDICATORS OF SUCCESS for Land and Development

PICTURED: NOTTINGHAM WATERSIDE DEVELOPMENT.

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PICTURED:

Mina Bharatof the Kidz r Us DayNursery which providesday nursery facilities inLeicester city.

Section nine

Structural theme 3

119

Achieving equality

AIM: To reduce economic inequalities and increase productivity by ensuringthat everyone has the opportunity to contribute to and benefit from theregion's sustainable economic growth.

Context

Regional economic success and wellbeing are dependent upon achieving high levels of productivity and high rates of economic

participation.118 Often, equality and productivity are perceived as separate issues with equality being about social justice and

productivity about economic performance. Recent Government research suggests that even with high levels of overall employment,

enabling those who are currently excluded from the labour market to gain and maintain employment will deliver productivity benefits

as well as furthering social justice.119 A successful region is one which recognises the connections between these and maximises

the contribution of its whole population to creating a sustainable economy which in turn will benefit all the region's people.

Sometimes inequalities are experienced by individuals because of their background (for example, black and minority ethnic [BME]

ex-offenders, homeless people, women, people with disabilities) and other times it is because of where they live. Individuals

experiencing disadvantage typically experience multiple social disadvantages which are compounded by their economic

exclusion. For instance, ex-offenders are 13 times more likely to be unemployed than the general population whilst being more likely

to be homeless, suffer from mental illness and lack basic skills.

The 'Raising Productivity' and 'Ensuring Sustainability' structural themes are largely about increasing the efficiency of the East

Midlands’ economy. Whilst a major part of the 'Achieving Equality' structural theme is about addressing inequalities in the

East Midlands rather than efficiency. Market failure can be a cause of inefficiency but can also lead to an inequitable distributional

outcome and it is for this reason that this structural theme seeks to address economic inclusion and renewal issues.

Scale of the challenge

The East Midlands, in common with other regions, has pockets of wealth and severe multiple deprivation, often in close proximity

to one another. In 2004 the employment rate in the East Midlands was 75.4%, which is above the UK average. There are significant

disparities within the region: the employment rate is 63.2% in the City of Nottingham compared to 80.3% in Leicestershire County.

At local level these differences are even more pronounced. These intra-regional differences are greater than inter-regional

differences. Tackling these disparities through the RES will allow our more disadvantaged communities to prosper and make a

significant contribution to the attainment of the regional economic performance PSA target.

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economic renewal social capital economic inclusion

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Achievingequality

121

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Place

Crude measurements suggest the

region suffers a north-south, and east-

west divide, with wealthier communities

located in the south and west and poorer

ones in the north and east. However,

pockets of deprivation exist across the

region, including in areas which are

generally prosperous. The 2004 Indices

of Multiple Deprivation (IMD) shows that

the region's more deprived communities

are located within our urban centres, the

former coalfields, the Lincolnshire

coastline and its rural hinterland.120 This

is illustrated on Map 2, where the

region's most deprived communities are

shaded in navy blue. The Indices of

Multiple Deprivation lists Nottingham

City as the most and South

Northamptonshire as the least deprived

areas in the region.

MAP 2 : Indices of Deprivation 2004 : Overall Rank

The region's moredeprivedcommunities arelocated within oururban centres, theformer coalfields,the Lincolnshirecoastline and itsrural hinterland.

PICTURED: BROOK PARK, SHIREBROOK.

PICTURED:

Colston BassettStore inNottinghamshire.

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AIM: To increase life chances for all leading to stronger and more cohesivecommunities, a dynamic society and a stronger economy.

Central to the concept of a flourishing region is making economic, social, environmental and cultural policy and investments work

better to contribute to a coherent whole. Increasingly, research reveals that in more affluent communities there are correlations

between community cohesion, strong stocks and flows of social capital, individual wellbeing, and economic prosperity.

A cohesive community is, therefore, one where:121

� the diversity of people's different backgrounds and circumstances are appreciated and positively valued;

� those from different backgrounds have similar life opportunities;

� strong and positive relationships are developed between people from different backgrounds and circumstances in the

workplace, in schools and within neighbourhoods.

What cohesion means for different communities in the East Midlands is dependent on the demographics, social make-up and

history of that community as well as recent influences from new arrivals. Promoting community cohesion involves addressing

fractures, removing barriers and encouraging positive integration between groups. Community cohesion is closely linked to

integration as it aims to build communities where people feel confident that they belong and are comfortable mixing and interacting

with others, particularly people from different racial backgrounds or people of different faiths.122

Quality of life experiences are not wholly influenced by economic circumstances, but deprivation and the polarisation of wealth can

create tensions in fragmented communities. Consequently, progress on increasing life chances for all is a fundamental feature of

building strong, cohesive communities and a dynamic society and economy.123

This RES supports a commitment to creating an environment where all people and

communities have the opportunity to create new and sustainable economic futures.

However, sustainable and cohesive futures don't just rely on economic solutions. As

with a flourishing region, cohesive communities are built on the foundations of strong

connections between economic, social, community, cultural, and environmental

considerations and creating a local culture of inclusion and participation.

Consequently, interventions need to be mindful of and actively integrate these

different issues. Social enterprises are an important business model as they

purposefully address social, community, cultural and environmental issues through

inclusive entrepreneurial behaviour.

Social capital is critical to creating these connections. Social capital describes the glue that binds different groups and networks

of people together,124 including the institutions, networks and relationships that characterise a thriving civil society. The existence of

neighbourhood networks, community groups, cultural opportunities, sport and leisure clubs, faith/religious organisations, local

business networks, youth and parent groups all contribute to positive values, norms and lives in local communities.125

Cohesivecommunities

Promoting communitycohesion involvesaddressing fractures,removing barriersand encouragingpositive integrationbetween groups.

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PICTURED:

St George's Centre,Nottingham; Gym atthe Peepul Centre,Leicester; below:Award-winningSulgrave Post Officeand General Store,Northamptonshire.

There are different types of social capital and different tools for building it: bonding social capital relates to strong links between

family, friends and neighbours; bridging social capital is concerned with the relationships between people of similar circumstances;

and, linking social capital is about connections between people from differing circumstances and situations (e.g., different social

classes, different economic experiences, etc.).126

All communities have stocks of bonding social capital. However, the challenge is how

this capital is mobilised and transformed to create new links between people in local

areas to create more cohesive and sustainable neighbourhoods.

Local authorities have a clear leadership role in developing cohesive communities.

The introduction of Local Area Agreements and their focus on integration between

social and economic development represents a significant opportunity. However, by

their very nature cohesive communities are characterised by the engagement,

participation and leadership of residents, businesses, voluntary and community

organisations, social enterprises, and public agencies working towards a common

and transformative purpose.

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Local authoritieshave a clearleadership rolein developingcohesivecommunities.

PROMOTING SOCIAL CAPITALSupport initiatives which mobilise existing social capital and create bridges and links between different groupsincluding volunteering opportunities.

COLLABORATION TO ENCOURAGE PARTICIPATIONEncourage collaboration between cultural, leisure and tourist bodies to encourage community participation, build socialcapital and contribute to community cohesion.

DEVELOP COHESIVE COMMUNITIES Support the development of cohesive communities through Local Area Agreements.

8 PRIORITY ACTIONS

Participation in formal voluntaryactivities in the last 12 months.

Increase the proportion of the East Midlandspopulation engaged in formal volunteering to within3 percentage points of the leading region by 2009.

INDICATORS OF SUCCESS for Cohesive Communities

PICTURED:

Textile businesson Leicester’sBelgrave Road.

126

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AIM: To ensure all people and communities have the opportunity to createnew and sustainable economic futures.

Introduction

The East Midlands has a diverse population mix and different types and scale of spatial communities: inner cities; rural (accessible

and remote); ex-coalfield; coastal; peripheral housing estates; and suburban. Despite the region's improved economic

performance over recent years there are many places which still have high levels of deprivation and low economic activity.

A truly flourishing region is one that recognises these inequalities and seeks to achieve economic wellbeing for all communities

thereby contributing to community cohesion. Clearly, creating the right conditions in the region to further enhance economic

performance will provide additional opportunities for all East Midlands’ communities. However, some disadvantaged places require

additional support and investment to realise the benefits of this performance and to generate new and indigenous forms of

economic activity.

The scale of the challenge should not be underestimated. Many disadvantaged areas have suffered from decades of decline

associated with industrial re-structuring. Consequently, solutions to the needs of disadvantaged areas need to be sustained and

integrated and enhance an area's adaptive capacity: the capacity to respond to external forces on the one hand and, on the other,

to create new paths of economic development from within.127

There are factors and characteristics common to the region's deprived areas which need to be attended to, although the scale and

relevance of these issues and the consequent solutions have to be location specific. Commonly, disadvantaged areas:

� lack an extensive and diverse enterprise base;

� have weak market demand and/or market linkages to other areas;

� have a low skills base and low aspirations particularly amongst potential entrepreneurs;

� are perceived as a poor opportunity for private sector investment;

� are sometimes economically marginalised due to physical inaccessibility;

� have diverse cultural and industrial heritages;

� have poor quality physical and natural environments;

� have higher levels of health inequalities;

� have higher levels of crime, more victims of crime, offenders and ex-offenders.

Increasing the role of ICT as an enabler in economic renewal interventions, for example, through encouraging ICT usage and

broadband applications can assist entrepreneurs in deprived areas to develop market linkages and market opportunities outside

of these areas.

Economic renewal

Achieving this scale of transformation requires the concerted and cooperative efforts of all stakeholders at a local level. The

introduction of Local Area Agreements (particularly the 4th Block on Economic and Enterprise Development) provides an inclusive

leadership mechanism through which economic renewal can be championed. In addition, the levels of investment available to

Neighbourhood Renewal Areas through the Local Enterprise Growth Initiative (LEGI) represent significant opportunities to invest in

structural change.

Fundamentally, the solution to the economic inequalities of disadvantaged areas hinges on the ability to create new indigenous

economic opportunities whilst exploiting the potential of linkages to adjacent areas of economic growth. However, as with a

flourishing regional economy, sustainable local communities need to develop the right assets and infrastructure to underpin an

economic renewal approach, as well as the right mix of skills, institutional capacity and support to succeed.

9a. Building local capacity, resources and support

Without the right mix of assets, capacity and support, new enterprise opportunities cannot flourish in disadvantaged areas.Communities need to ensure that they have the necessary institutional capacity so that they are better able to make new economicopportunities happen. Consequently, local areas need to better understand the assets, capacity and support services they alreadyhave access to before developing a local economic renewal strategy. In addition, to ensure that interventions are grounded andsustainable, community asset development is important. Examples of asset development approaches in the East Midlands includeSherwood Energy Village, Ibstock Community Enterprise, and the Genesis Social Enterprise Centre.

There are many different forms of assets available to local areas: financial, economic (existing businesses, employment), cultural,people, social, and the built and green environments. In terms of people, disadvantaged people often have latent and untappedentrepreneurial talent and behaviour. Sometimes this may be an enterprising individual, or it could be a network/group of peoplewho have a common passion. Consequently, communities which are able to identify and mobilise these untapped resources candevelop innovative economic opportunities. In particular, social enterprises are important vehicles for mobilising latent talent andbuilding the capacity of local areas to develop and sustain new economic opportunities.

9b. Reviving local infrastructure and environments

The ‘Ensuring Sustainability’ structural theme outlines what needs to be done to ensure that the region has in place (and can

sustain) the right mix of assets, infrastructure and connectivity to achieve our regional vision of economic wellbeing. Successful

local economic renewal is dependent upon areas improving, reviving and investing in their local environments to ensure the right

conditions for economic development.

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EFFECTIVE ENGAGEMENT & INVOLVEMENT OF LOCAL BUSINESSES AND RESIDENTSEnsure that people and businesses in local communities have the skills and capacity to develop local economicrenewal solutions through:� the provision of economic development skills training;� the provision of economic/enterprise coaches and business brokers;� building social capital between the statutory, business and community sectors.

INCLUSIVE BUSINESS SUPPORT Ensure that business support is responsive to the needs of all communities and under-represented groups through:� the integration of specialist needs into the regional business support model;� support for enterprise coaching models in the most disadvantaged areas (see priority action 2b-1 under the Enterprise

and Business Support section).

9a PRIORITY ACTIONS

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PICTURED: PEEPUL CENTRE, LEICESTER.

People are put off from living, working or investing in an area if it has a poor environment or a bad image. Crime and the fear of

crime are regularly cited as key reasons for companies deciding not to invest in deprived areas. Further, finding suitable and

available premises for new business start-ups can be a particular problem for entrepreneurs in deprived areas. The issue of suitable

sites and premises has been addressed under the 'Ensuring Sustainability' structural theme, along with the requirement to provide

access and connections to employment and economic opportunities. However, it should be noted that these problems can be more

severe in the most deprived communities in the region.

9c. Stimulating new markets and enterprise opportunities

Ultimately, economic renewal is dependent upon markets which provide for sustainable enterprise, employment and wealth

creation. Market activity can be created by building linkages to adjacent areas, attracting new investors and/or stimulating new

local markets. Some of the markets for products and services can be stimulated within local areas, although sustainable and

successful enterprises will also need to consider wider markets.

However, to realise and sustain markets, deprived areas also need access to appropriate investment. Where there is financial

market failure Community Development Finance Institutions (CDFIs) can fill this gap; in other cases the statutory sector can take a

strong leadership role through making investments (including grants and loans) and utilising their procurement functions to

stimulate new local markets.

As the ‘Raising Productivity’ section demonstrates, the financial power of public

procurement is significant. In disadvantaged areas, public procurement has the

potential to play an enhanced role through developing procurement solutions that

address local public service delivery whilst catalysing and promoting new local

economic linkages. Clearly, enterprise density in disadvantaged areas is less than the

regional average. As such, public authorities should be encouraged to develop

markets and help new entrants. New entrants can be new or existing private or social

enterprises. Social enterprises have the potential to deliver additional benefits as they

deliver economic, social and (in many cases) environmental benefits as well.128

As well as accessing new money, economic renewal can be enhanced by making existing resources work harder. A successful

economy is one which seeks to increase the multiplier effect of each pound spent in a local area thereby increasing economic

activity and wealth retention. Consequently, solutions to economic renewal are not solely reliant upon new investments, but on local

stakeholders identifying ways in which existing resources can enhance their local impact. As the national Neighbourhood Renewal

Strategy recognises, in deprived areas the problem is not necessarily that too little money flows into a neighbourhood; rather, it is

what consumers, public services and businesses do with that money. Too often it is spent on services with no local presence, and

so immediately leaves the area.129

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Economic renewal can beenhanced bymaking existingresources workharder.

130

BUILT AND GREEN ENVIRONMENTSImprove the quality of the built and green environments to enhance local economic prospects through:� applying best practice standards for design and construction (see priority action 6a-2 in the Environmental

Protection section);� working with developers to ensure the integration of green infrastructure factors and improving the public realm

in development briefs.

ADDRESSING CRIMEReduce the impacts of crime on communities and businesses through neighbourhood and business crimereduction initiatives and activities to reduce re-offending.

9b PRIORITY ACTIONS

Consequently, efforts to bring new investments into a local area and/or to enhance the multiplier effect of existing resources must

be matched by efforts to build the capacity of local businesses and people to benefit from these investments. This means that the

value of the investment can be made to stick and last into the medium and longer terms. Lessons from the last 20 years of

government regeneration policy reveal that the impact of funding into a disadvantaged area can be sustained if local people and

businesses are actively involved in the process of regeneration.

Many local areas often have other untapped economic assets which are not linked into the local economy. Often this may be in the

form of a large scale employer which recruits its staff from other areas or contracts with suppliers not linked to the local area.

Working with large firms to embed them in the local economy can bring enterprise and employment opportunities.

Creating effective market linkages within and between different spatial areas is crucial to developing both a networked economy

and individually competitive spatial areas. The lack of market demand or poor market linkages are fundamental reasons for the

enterprise gap in deprived areas.

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NEW MARKETS AND ENTERPRISE OPPORTUNITIESStimulate new local markets and enterprise opportunities by unlocking the potential of local procurement by:� encouraging local public authorities to adopt procurement approaches which deliver local, social,

environmental and community benefits;� supporting the development of social enterprises, and the broader Voluntary and Community Sector to deliver

services whilst improving the economic, social and environmental capacity of a local area;� encouraging large businesses to consider supply chain opportunities in their local areas.

IMPROVE ACCESS TO FINANCEImprove access to finance for all entrepreneurs irrespective of location, personal characteristics and type ofbusiness by:� providing an appropriate range and specification of financial services products tailored to their needs;� influencing mainstream financiers;� investing in community development finance instruments (CDFIs);� promotion and coordination of CDFI investments.

9c PRIORITY ACTIONS

Economic activity rate (% workingage) in urban and rural areas.

Maintain rural rates above 80% and increase urbanactivity rates to 78% by 2009.

INDICATORS OF SUCCESS for Economic Renewal

PICTURED:

The Priory Centrein Lincoln.

132

10

AIM: To help overcome the barriers, or market failures, that prevent peoplefrom participating fully in the regional and local economy.

Introduction

Economic Inclusion describes the process of overcoming the barriers that prevent people from participating (and sustaining

participation) in the economy. Economic inclusion is about ensuring people have the skills they need to become employable;

assisting those in work to improve their skills; addressing inequalities in the region's employment levels and ensuring that everyone

has the opportunity to consider self employment as a career and lifestyle option.

Employment is the single most effective means of tackling poverty and social exclusion.130 Work is at the heart of our society, and

from it people gain self confidence and financial reward; those who work are generally in better health, have wider social contacts

and a stronger sense of self-worth.

Many economically disadvantaged people also experience other factors which impact on their ability to enter and retain

employment. Consequently, economic inclusion activities must be complemented by actions which address broader social

inclusion barriers: childcare provision and assistance to people with other caring responsibilities; personal financial exclusion;

availability of affordable and quality housing; health inequalities; and the effects of crime. The voluntary and community sectors

have an important role to play working with employment, education and training providers to develop holistic and integrated

solutions to the needs of excluded individuals.

Increasing ICT access to and usage by communities living in deprived areas can improve their quality of life, for example through

increasing levels of basic skills, building employability and entrepreneurial capabilities as well as facilitating better dialogue with

the public sector on the delivery of local public services. Hence, addressing the digital divide is critical to not only regenerating

deprived areas but also in bringing socially excluded communities back into the mainstream of economic activity as well as

empowering them to influence the public policy discourse.

The economic case for increasing and sustaining economic participation rates is strong. Ultimately, increasing participation

reduces societal costs and increases aggregate economic gain. Increasing participation in the economy has a number of positive

effects: it improves an individual's economic participation, productivity and prosperity; which leads to higher income levels and

purchasing power. Economic inclusion helps to address other elements of an individual's experiences of exclusion; and, ultimately

these positive impacts help to reduce societal costs (e.g. social security and jobseeker costs; costs due to ill health; costs related

to crime, etc) all of which in turn help to boost the region's economic performance.

Economicinclusion

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10a. Employability

Lack of participation in the labour market impacts on an individual's standard of living and can be associated with other factors

contributing to the experience of deprivation, such as poor health. Employability is about ensuring that people are prepared for the

jobs that exist now and will exist in the future thereby reducing their vulnerability in the labour market. For some, simply getting a

job will be the first step to getting a better job.

The employment rate in the East Midlands is above the UK average but this disguises pockets of severe labour market deprivation

that exist within the region. The region's economy also has a high proportion of jobs that are low skilled, low paid and require few

or no qualifications. Evidence shows that 12.2% of the economically active, working age population have no qualifications,

compared to 10.8% in the UK.131

Although the East Midlands has an above average supply of jobs which require few or no qualifications or skills, an individual with

no qualifications is still far more likely to be unemployed and far more likely to earn low wages if they are in employment. The

employment rate for those with no qualifications in the East Midlands in 2003 was only

54.9%, compared to 78.5% for those qualified up to an equivalent of 5 GCSEs at A*-

C (Level 2). Additionally, the average weekly pay for workers with no qualifications in

2003 was only £229, compared to £268 for those with a Level 2 qualification and less

than half that earned by workers with an equivalent of a degree (Level 4). Improving

basic skill levels amongst adults is therefore important to help address significant

social inequalities as well as contributing to the improvement of workforce

productivity.132

This is a considerable challenge for policy makers, as all adults should be equipped

with a basic level of qualification on leaving compulsory education. Although there

have been marked improvements in the qualifications of young people leaving the education system in recent years, evidence

suggests that the majority of people attain their highest qualification level before the age of 25. The Government's Review of Skills

undertaken by Lord Leitch suggests that half of the working age population required for 2020 is already over 25.133 Given that skill

requirements are expected to continue to increase in the future, combined with an ageing population and the prospects of a later

retirement age, this means that there is a risk that older individuals with no or limited qualifications will become trapped in a cycle

of low-paid casual work and intermittent periods of worklessness and benefit dependency.

Improving skills levels in the East Midlands is both important for the future competitiveness of the economy and for individuals to

ensure that they adapt to changing conditions and sustain their employability. Interventions to increase the demand for and supply

of skills are discussed under the ‘Raising Productivity’ structural theme but there are some groups of people who are under-

represented in the labour market and face additional barriers and it is these who are addressed here. These groups include: ethnic

minorities; people with disabilities and those on incapacity benefit; lone parents; people aged over 50; under 18s who are outside

education or training, women and migrant workers, and people living in the most deprived areas, including those isolated by

remoteness and sparsity.134 Statistics relating to under-represented groups are detailed in Annex C.

There is evidence to suggest that while 73% of workplaces in the UK have equality and diversity policies (including 96% of large

private sector businesses and 45% of SMEs), the application of theses policies is lower. Twenty three per cent of large private sector

businesses and 10% of SMEs apply them.135

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Improving skills levelsin the East Midlands isimportant for both thefuture competitivenessof the economy andfor individuals.

134

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PICTURED: DISABILITY DIRECT, DERBY.

10b. Achieving a healthy workforce

The East Midlands faces some major challenges if it is to improve the health of those that live and work in the region. Each year it

is estimated that £222m is lost to the region's economy as a result of people taking sickness absence. Although the East Midlands

has a slightly lower rate than average for workers taking days off due to work-related sickness or injury, at 1.5 days per worker

compared to 1.6 in England, this still lags the leading regions considerably.136 There is also a legacy of long term ill health; notably

in the northern, coastal and urban areas. In these areas there appears to be a close association between high concentrations of

worklessness and greater incidence of poor health. Additionally, 24.8% of the East Midlands’ population is classified as obese -

the highest of all the English regions.137 The relationship between obesity, ill health, an ageing population and a decline in physical

activity is putting increasing demands on the region's health services and having a detrimental effect on the region's productivity.

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ENHANCE EMPLOYABILITY OF THE MOST DISADVANTAGEDImprove the employability of those without skills and qualifications through:� the provision of ‘skills for life’ (including ESOL (English for Speakers of Other Languages), vocational and core

employability skills);� encouraging the take up of Level 2 qualifications.

ADDRESS WORKLESSNESSAddress persistent and high levels of worklessness in communities by :� connecting local people to job opportunities created by public sector investment in key infrastructure projects;� encouraging private sector developers and employers to recruit from underutilised local labour sources;� connecting people in areas of limited opportunity to areas of growth;� supporting innovative solutions to long term unemployment such as work trials, peer mentoring schemes and

intermediate labour markets.

IMPROVING DIVERSITY OF THE WORKFORCEWork with employers to increase the diversity of the East Midlands workforce and address the under representationof different groups in work by:� developing a regional campaign to demonstrate the business case for diversity;� providing support to businesses to undertake diversity assessments and develop action plans;� creating and promoting an East Midlands diversity quality mark for employers.

10a PRIORITY ACTIONS

WORKING WITH EMPLOYERS TO IMPROVE THE HEALTH OF THE REGION'S WORKFORCEEnsure that employers are informed on the detrimental effects of poor health on business performance and takesteps to improve and protect the health of their employees by:� promoting the benefits of a healthy workforce through business support services;� working through the Investment for Health Strategy to promote healthy workforce initiatives.

ADDRESS ILL HEALTH AS A BARRIER TO EMPLOYABILITYEnsure that those who experience poor health as a barrier to employment are supported in entering the labourmarket in positions consistent with their personal circumstances. This will be achieved by ensuring that employmentsupport activities in the region take account of the varying health needs of these groups.

10b PRIORITY ACTIONS

10c. Enterprising people

Section 4 highlighted a number of economic challenges facing the region, both global and local. The 'Raising Productivity'structural theme sets out the role of enterprise and business support in responding to these challenges. Those actions are genericand aimed at all who wish to pursue entrepreneurial activities. This section is more directly concerned at ensuring that those fromthe most disadvantaged groups and communities in the East Midlands have access to relevant tailored support.

Conventional thinking suggests that entrepreneurial behaviour solely relates to starting a new business. Recently though, the termenterprise has been used to convey the need for a more dynamic cultural change where entrepreneurial behaviour is utilised toaddress not only economic but social and environmental challenges. Thus, enterprise is not only a vehicle for wealth creationopportunities but also a catalyst for other socio-economic benefits.

Consequently, a strong entrepreneurial base can contribute to achieving economic, social, environmental and cultural objectives through:138

� helping to foster social and economic cohesion (reflecting their size, new and small enterprises tend to be moreembedded in their local community);

� creating economic inclusion opportunities in deprived areas both in terms of ownership and employment creationopportunities; and

� unlocking personal potential and contributing to personal wellbeing in terms of enhanced self fulfilment, freedom andindependence.

However, entrepreneurial activity will not be an appropriate route to economic inclusion for everybody, and that for someemployment will offer the best route to inclusion. This Strategy sets out a range of support measures for both routes.

The common barriers that people face in setting up a business are accessing appropriate business support; and accessingappropriate finance for start-up and growth (debt, equity and working capital).139 How individuals experience these barriers isdependent upon their background and, sometimes, on where they live. As such, business support solutions need to be sensitiveto an individual's characteristics, location, needs and experiences.

employment, learning and skills enterprise and business support innovationtransport and logistics energy and resources environmental protection land and development

cohesive communities economic renewal economic inclusion

Creating aninnovation cultureand community inthe East Midlandswill accelerate anddrive productivity

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PICTURED: COMPUTER SUITE AT AGE CONCERN CENTRE, LEICESTER.

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PICTURED: FLORISTS ON BELGRAVE ROAD, LEICESTER.

In terms of business support, the needs of under-represented and disadvantaged groups should be addressed through thedevelopment of a cost effective and sustainable approach. This means the provision of a core package of support (e.g. UniversalStart-up Offer and the Information, Diagnostic and Brokerage (IDB) model) augmented, where necessary, to meet the demonstrableneeds of specific groups.

For example, the ageing population of the UK means that one third of enterprises willneed to be transferred to the next generation in the coming 10 years.140 In addition, by2028 the pensionable age group will account for 30% of the region's populationcompared to a current share of 19% of the population. This will have significantimplications for both health care and labour market participation and is likely toconsiderably alter the balance between the economically active and inactive.141 Thismeans that the region will need sustained efforts to build enterprise aspirations andcapabilities with younger and older people if it is to capitalise on this challenge.

The presence of black and minority ethnic (BME) communities - including new arrivals- in the region is also set to grow over the next 20 to 30 years with areas such asLeicester seeing this community making the transition from a minority to a majority population.142 Where this is the case, there arereal opportunities to empower local communities for them to be the entrepreneurial architects of local regeneration initiatives. Inaddition BME communities have a much younger age profile than the white population: 45% of the UK's BME population is lessthan 25 years old, compared to a third of the white population.143

Furthermore, although entrepreneurship levels amongst BME communities are slightly higher than the regional average, there aredisparities between different ethnic groups. For example, the self employment rate amongst Indians, Pakistanis and Bangladeshisis nearly 21/2 times greater than that of African-Caribbean communities.144 In addition, the educational attainment of BlackCaribbean, Bangladeshi and Pakistani pupils is well below the national average.145 Hence, education initiatives need to focus bothon improving education attainment levels and the aspirations of these young people in terms of entrepreneurial behaviour. Thegender dynamics of enterprise creation are discussed under the 'Raising Productivity' structural theme, where it is noted thatalthough women make up 51%146 of the region's population they are half as likely to set up in business as men.147

Consequently, in order to realise the opportunities and respond to the challenges of global economic change, increasingentrepreneurial behaviour in the East Midlands is crucial. The region's diverse population mix, rich cultural heritage and changingdemographic patterns mean that in order to drive this cultural challenge forward, it is approached in an inclusive and integrated way.

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Proportion of the population ofworking age claiming key benefits.

Economic activity rates in bottomdecile of East Midlands LocalAuthority Districts/Unitary Authorities.

To halve the gap between the East Midlands and theSouth East from 3.6 percentage points to 1.8percentage points by 2009.

Increase economic activity rates in the bottom decileof LADs/UAs to 75% by 2009.

INDICATORS OF SUCCESS for Economic Inclusion

The self employmentrate amongst Indians,Pakistanis andBangladeshis is nearly21/2 times greater thanthat of African-Caribbean communities.

DEVELOP ENTREPRENEURSHIP SKILLSEnsure the region consistently generates entrepreneurs from all sections of society by: � promoting entrepreneurship as a viable career choice through targeted awareness raising activities (see priority

action 2b-1 in the Enterprise and Business Support section);� integrating entrepreneurship at all levels of the education curriculum (schools, FE and HE) and creating effective

links between education institutions and businesses;� providing business support appropriate to all sections of society (see the priority action 9a-2 in the Economic

Renewal section).

10c PRIORITY ACTIONS

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Oakham Market,Rutland.

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The ability of the East Midlands to achieve its vision of become a flourishing region will depend on the extent to which vibrant andcohesive communities in attractive and prosperous towns, cities and rural areas, in which people wish to live and invest, can becreated and maintained.

Our cities and towns in particular have a major contribution to make in driving and enhancing our regional competitiveness andproductivity. Strong cities are necessary for strong regions and increasingly strong ‘city-regions’ are beginning to play a role insupporting and driving regional economies. Collaborative efforts across cities and between cities and their surrounding areas canimprove competitiveness, skills and transport connectivity and bring new dynamism and creativity in finding solutions. Nottinghamand the greater Nottingham conurbation area, Leicester and Derby will look to capitalise on their unique strengths and proximity toraise their economic game. Northampton, an increasingly important urban settlement, and the City of Lincoln have significant scopeto bring wider benefits to their surrounding hinterlands and neighbouring areas, andNorthampton in particular, to the rest of the region. Within this context, partners in theregion, especially the Three Cities sub-region, may explore the potential for additionalhousing and associated growth presented by the emerging Department forCommunities and Local Government (DCLG) led 'Key Growth Points' initiative.

Our diverse rural and coastal areas equally have an important contribution to make.Nearly one third of the population of the East Midlands, approximately 1.2 millionpeople, live in our rural areas. These communities have significant capacity toencourage rural enterprise, including land-based industries, and in providing anattractive environment for inward investment. Investment in rural areas to encouragevibrant and sustainable communities will enhance the quality of life for urban as wellas rural residents. Key to these areas being vibrant and sustainable is the retention of a balanced community of all age groupsincluding young people, particularly 16 to 24 year olds. There needs to be adequate provision of all services to rural communities,including housing, transport and advice and support for the wide spread of rural businesses including agriculture. There is a realand vital interdependence between our rural and urban communities.

Sub-regional investment plans and strategies will be critical in identifying clear actions that target specific challenges at sub-regional level within the context of the overall priorities and challenges identified at regional level. There will be strong links withLocal Area Agreements particularly the new enterprise support resources through the Local Enterprise Growth Initiative (LEGI).Sub-regional Investment Plans will also be key in levering in private sector resources and business engagement.

The majority of priority actions outlined in this Strategy are not geographically specific, with a few exceptions; they will apply, witha greater or lesser degree of emphasis across the entire region.

Eastern sub-area

This sub-area which consists of the counties of Lincolnshire and Rutland is predominantly rural in character, but also includes theCity of Lincoln and a number of significant towns, such as Grantham, Boston, Sleaford, Skegness, Spalding, Louth, Gainsborough,Bourne, Oakham and Stamford. There are significant disparities in performance and circumstances at local levels across the sub-area and these disparities make straight forward generalisations problematic. In general, Lincoln and the A1 corridor are

Section ten

Challenges for thesub-regions

Nearly one third, ofthe population of theEast Midlands,approximately 1.2million people, live inour rural areas.

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characterised by very different circumstances and prospects than the east coast. The latter faces major structural challenges thatinhibit both economic performance and wellbeing.

Estimates of recent growth rates in GVA and employment for the Eastern sub-area exceed the regional average and are expectedto do so over the next decade. However, it must be emphasised that the sub-area is starting from a significantly lower base thanelsewhere in the region: it is estimated that GVA per head in Lincolnshire was only 77% of the UK average in 2003, a slightimprovement since the low point of 75% in 2000. Notwithstanding relatively positive growth projections, at these rates of growth,convergence with the regional average would take many decades. There is considerable variation across the sub-area, withstronger growth anticipated around the City of Lincoln and along the A1 route in the southern half of Lincolnshire (linked toPeterborough). In contrast, growth is projected to be weaker in East Lindsey on the Lincolnshire coast.

The Eastern sub-area accounts for 16.6% of the regional population, with 710,000 residents in 2004, but is by far the largest sub-area in land size, and thus has the lowest overall population density. Whilst between 1994 and 2004, it recorded the largestpopulation increase in the East Midlands, growing by a total of 11.3%, compared to an overall regional growth of 5.1%, this growthhas been driven by a strong increase in the pensionable age group, as described in more detail in the demography section of theEvidence Base and identified as one of the regional challenges in Section 4.

Land use in the Eastern sub-area is predominantly arable and mixed farming, with a concentration of horticulture, includingvegetable, salad, flower and bulb production especially in the Fenland area of south Lincolnshire, which contains some of the mostfertile farmland in the country. Food processing, packaging and distribution industries have grown in this area, where increasingnumbers of migrant workers provide a critical contribution to the local economy and an additional dimension to the socio-economicprofile of the area. It is believed that the economic impact of CAP reform in this sub-region will not overall be unduly negative. Inaddition to the already highly market-responsive food production sector, large-scale grain, sugar beet and other 'commodity'production offers potential for diversification into non-food and renewable energy markets.

In labour market terms, whilst the Eastern sub-area compares relatively well to the regional average, with higher employment ratesand lower unemployment rates, this again masks significant local variation - with acute deprivation along the coastline, indicativeof remote rurality and dependence on weak local labour markets. Earnings are somewhat lower than the regional average, with theearnings of those resident in the Eastern sub-area exceeding the earnings of those working in the sub-area, suggesting that manyresidents in higher paid jobs commute to work elsewhere.

The Eastern sub-area performs less well in its share of the business population and in indicators of enterprise. The sub-area has arelatively large business population, accounting for 18.5% of the regional total, but density is very sparse when one takes into account

PICTURED: THE LINCOLNSHIRE SEASIDE.

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its large area size. The VAT registration rate per 10,000 population head in 2004 was significantly lower than the regional average.The coast suffers particular problems relating to access and deprivation. The UK's first Coastal Action Zone (CAZ) is aiming toaddress these problems, by finding new service delivery methods and promoting new initiatives to address the distinctive socio-economic problems suffered in coastal areas.

Key challenges

� Relative economic peripherality and poor transport and communications.

� Low population densities in more remote rural areas.

� There is a reliance on weak local labour markets characterised by high levels of casualisation and extensive use oftemporary, seasonal and migrant labour usually in low-skilled and low-paid occupations.

� Poor transport links constitute significant barriers to participation in training, education and employment.

� Relatively low levels of economic activity.

� Significant incidence of 'hidden unemployment' in the north and east of the sub-area.

� Extreme disparities in performance at local level across the sub-area.

Sub-regional emphasis

Key sub-area strategic priorities � Enterprise and business support� Employment, learning and skills� Land and development� Transport and logistics

The Northern sub-area

The Northern sub-area includes the north of Nottinghamshire and north-eastern Derbyshire. This sub-area has been heavilyaffected by the decline of traditional manufacturing industries and coalmining, and covers a large proportion of the East Midlands'former coalfield areas. The Northern sub-area has a number of sub-regional centres, such as Mansfield, Worksop and Chesterfield,and has close functional ties with the cities of Nottingham and Derby in the East Midlands, and Sheffield in South Yorkshire.

The Northern sub-area accounts for 16.4% of the East Midlands population, with 702,900 residents in 2004. This is comparable tothe population of the Eastern sub-area, but it is considerably more densely populated given its smaller geographical size. Thepopulation of the Northern sub-area has grown least of all the sub-areas between 1994 and 2004, at a total of 2.1%, 3 percentagepoints less than the East Midlands overall, with population decline in a number of districts. Sheffield, in the Yorkshire and theHumber region, has a significant impact on the Northern sub-area, in terms of employment and provision of services. This isdemonstrated by the inclusion of some parts of this sub-area within the Sheffield city region.

The Northern sub-area has experienced some of the lowest GVA and employment growth rates in recent years, but is forecast togrow in line with the regional average over the next decade. This picture is not uniform across the sub-area, with areas to the northof the region, close to Sheffield and Rotherham, forecast to grow faster than the regional average, whilst districts in the centralcoalfields area, north of Nottingham City are forecast to experience slower GVA growth rates and to continue to experience acontraction in the number of jobs.

In labour market terms, parts of the sub-area exhibit characteristics indicative of acute employment deprivation. Overallemployment rates are significantly lower than the regional average, but again local variations are large. Employment rates in thedistricts of Bolsover and Mansfield were around five percentage points below the districts of Bassetlaw and Newark and Sherwood.Estimates of 'hidden unemployment' are also high in this sub-area where relatively high levels of incapacity benefit claimantssuggest that health problems constitute a significant barrier to economic participation.148 Earnings in the Northern sub-area are thelowest of the five sub-areas. The average earnings of those who work in the sub-area are considerably lower than the averageearnings of residents of the sub-area - suggesting that many higher paid workers commute to work elsewhere.

The Northern sub-area accounts for 14% of the region's VAT registered business stock, but business registration is particularly weak.The sub-area recorded a VAT registration rate of 31.2 businesses per 10,000 population in 2004, the lowest rate of the five sub-areas.

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Key challenges

� High levels of unemployment, estimated 'hidden unemployment' and associated ill health should constitute a major focus ofpublic sector intervention.

� Physical regeneration and economic renewal will remain major long term priorities for the sub-area.

� Despite some success in generating replacement jobs in the service sectors, there is concern that these employmentopportunities do not match the quality of the jobs lost.

� A significant legacy of environmental damage associated with its industrial past.

� Major strategic sites are in need of physical regeneration. Proximity to the M1 and the Sheffield/Rotherham conurbation doeshowever present the sub-area with significant economic opportunity that must be exploited.

� Many communities are small and relatively isolated from services and employment.

Sub-regional emphasis

Key sub-area strategic priorities � Economic renewal

� Enterprise and business support

� Employment, learning and skills

� Land and development.

Peak sub-area

The Peak sub-area incorporates the districts of High Peak and Derbyshire Dales and the part of the Peak District National Parkwhich falls in the East Midlands. The sub-area is predominantly rural in character, with a few smaller towns such as Matlock andBuxton. It is situated close to the Greater Manchester conurbation in the North West region, which along with the attractivelandscape, has contributed to the Peak sub-area recording some of the strongest growth in property prices in the East Midlands.

The Peak sub-area is both small in geographical terms and relatively sparsely populated, and as such accounts for only 3.8% ofthe East Midlands’ population with 160,500 residents in 2004. Population growth from 1994 has been below the regional average,increasing by just 4% in the last decade. Like the Eastern sub-area, the Peak sub-area has a high proportion of its population overpensionable age.

Much of the economic activity of the Peak sub-area relates to either tourism or primary industry. The area is strong in terms of tourismwith the Peak District National Park being the most visited National Park in Britain, with strong emphasis on the number of day visitors.Geology and climate within the Peak sub-area dictate that agriculture is restricted to livestock/dairy production and this sector iswidely thought to be the most likely to be adversely affected by recent reforms of the Common Agriculture Policy (CAP).

Labour market indicators for the Peak sub-area compare well to the regional average, with an employment rate of almost 78% in2004, and one of the highest economic activity rates in the region. Residence based earnings are above the regional average, but,like other sub-areas in the East Midlands, the earnings for those working in the Peak sub-area are below the regional average.

Not surprisingly, given its small geographical size and relative rurality, the business population of the Peak sub-area is very small,accounting for only 5.3% of the total East Midlands’ VAT business stock at the end of 2004. However, the registration rate is relativelystrong, at 41.1 businesses registering for VAT in 2004 per 10,000 population head.

Key challenges

� This area is small in size, both in terms of land area and population, but the environmental quality of the Peak National Parkgenerates significant wealth for the region through tourism.

� House price inflation has caused affordability problems for some residents.

� Although the Peak sub-area is well connected to the greater Manchester conurbation there are issues with connectivity toother areas within the East Midlands.

� Upland livestock farming faces particular challenges in adapting to the impact of Common Agricultural Policy reform, andwill require appropriate support.

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Sub-regional emphasis

Key sub-area strategic priorities � Environmental protection � Transport and logistics� Enterprise and business support� Employment, learning and skills

Three Cities sub-areaThis sub-area comprises of the cities of Derby, Nottingham and Leicester, and their surrounding districts, including parts ofDerbyshire, Leicestershire and Nottinghamshire. The cities act as the region's major administrative, commercial and culturalcentres, although they exhibit substantial pockets of deprivation. The Three Cities sub-area has the most enclosed location of thefive sub-areas, with only one border external to the East Midlands.

This sub-area accounts for the largest proportion of the region's population, a total of 2,059,600 estimated residents in 2004, almosthalf the total East Midlands’ population. However, population growth has fallen below the regional average over the last decade,with population decline in Nottingham and Leicester cities. This has been offset to an extent by very strong growth in some of theoutlying areas: for example the district of Harborough, adjacent to Leicester city, grew by 14% between 1994 and 2004.

The sub-area includes the largest local economies in the East Midlands. Estimates of GVA per head for Nottingham City are 32%above the UK average, the highest in the region, whilst GVA per head also exceeds the national average in both Leicester andDerby. However, historic and forecast GVA and employment growth rates are below the regional average, suggesting that the sub-area is not maximising its opportunities for growth.

Labour market indicators for the sub-area suggest significant challenges relating to acute deprivation in all three majorconurbations. The Three Cities sub-area has the highest unemployment rate of the five sub-areas, and both employment andeconomic activity rates are below the regional average. However, the large student populations in the three cities contribute to lowereconomic activity rates. Earnings in the Three Cities sub-area are above the regional average, but unlike the other sub-areas in theEast Midlands, the average for those working in the sub-area is higher than the average for residents - suggesting that a significantproportion of higher paid individuals commute to the sub-area from elsewhere. There are significant local variations, with residencebased earnings in some of the affluent areas around the three cities considerably in excess of the regional average.

The Three Cities sub-area accounts for the largest share of the region's business population, at 45% of the East Midlands’ VATregistered business stock at the end of 2004. However, on indicators of enterprise activity, the sub-area compares less favourably,with below average business registration rates. The Three Cities collaboration includes the three urban Unitary Authorities, workingin partnership with their County Councils to tackle economic development.

Key challenges

� The Three Cities sub-area is characterised by the juxtaposition of great wealth and economic dynamism with extremerelative deprivation.

� The three cities themselves (Derby, Leicester and Nottingham) are not ‘punching above their weight’ in economic andcompetitiveness terms. The need to optimise the performance of the region's cities as principal engines of economic growth whilst addressing the economic exclusion of deprived communities who seem not to benefit from the huge economicopportunities on their doorstep, is increasingly recognised as important.

� Low levels of functional specialisation across the cities suggest a pressing need to build the functional linkages andcomplementarity of the cities.

Sub-regional emphasis

Key sub-area strategic priorities � Innovation� Transport and logistics� Land and development� Enterprise and business support� Employment, learning and skills

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PICTURED: THE SHIRES SHOPPING CENTRE, LEICESTER; NORTHAMPTON TOWN CENTRE.

Southern sub-area

This sub-area describes the county of Northamptonshire and its relatively accessible rural areas in close proximity to a number oflarge towns, particularly Northampton, but also Corby, Kettering, Daventry and Wellingborough. Much of the sub-area can bedescribed as highly affluent, with high levels of labour market participation and higher than average property prices. However,pockets of deprivation are evident - particularly in the town of Corby and in parts of the sub-area's other main towns, and to a lesserdegree in rural areas where access to key services can be difficult for less mobile groups.

The Southern sub-area has close functional relationships with London, the South East, East of England and the West Midlands, withthe M1 and A14 corridors running through the sub-area, and rapid train links to London from many of the area's towns, althoughnotably not Corby. Its location makes it a key focus for logistics activity, as well as residence for many professionals working inLondon and the South East. The south of the sub-area falls within the Milton Keynes South Midlands (MKSM) Growth Area.

The Southern sub-area had an estimated population of 646,800 in 2004, which is 15.1% of the regional total. It has experiencedstrong population growth over the last decade, growing by 9% from 1994, which significantly exceeds the regional average.Population growth is expected to increase considerably over future years as a result of the MKSM development with the RegionalSpatial Strategy making provision for an additional 99,500 houses for the period 2001 to 2021.

Overall, the Southern sub-area has very high employment and economic activity rates: both of which are in excess of 80% of theworking age population. Unemployment rates are one percentage point below the regional average, almost two percentage pointsbelow the UK average. It would therefore be reasonable to say that much of the sub-area is at full employment. However, localvariations are considerable. Earnings for both those resident and those working in the sub-area are above the regional average butthis overall picture of relative affluence masks pockets of far lower earnings.

The Southern sub-area has a relatively significant share of the region's business population, at 17.2% of the East Midlands VATbusiness stock at the end of 2004. It has a particularly high business registration rate, at 44.2 per VAT registrations per 10,000population head in 2004. This is almost 10 registrations per 10,000 population head higher than the regional average.

Key challenges

� The Southern sub-area enjoys considerable locational advantages and relative affluence, with notable exceptions.

� A significant policy focus must be to maximise the benefits of proximity to London and the South East. Northampton is at theheart of the MKSM growth area and this presents the sub-area with a huge economic opportunity, but also major challengesto deliver development on this scale while ensuring that essential infrastructure, employment provision and services keeppace with growing demand.

� Projected housing growth and associated investments in Northampton will reinforce Northampton's economic significanceover the medium to long term.

� Regeneration of Corby to ensure it can benefit from the opportunities in other parts of the sub-area.

� Continued development of the Urban Development Corporation in West Northamptonshire and the Local Delivery Vehicle inNorth Northamptonshire.

Sub-regional emphasis

Key sub-area strategic priorities � Transport and logistics

� Land and development

� Enterprise and business support

� Employment, learning and skills

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Section eleven

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Conkers VisitorCentre, Leicestershire.

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Integrationand delivery

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Delivering a flourishing region

Delivery of the Strategy will be achieved only by a concerted effort by all public, private and voluntary sector organisations in theregion, and with the support of national Government. The RES is the region's Strategy, not emda's; the contribution emda will maketo delivering the RES is laid out in its Corporate Plan. The vision of creating a flourishing region can therefore be realised only if itis shared by all key stakeholders across the region and if those same organisations and partners are committed to playing theirpart in its implementation.

This section summarises the wide range of partners and stakeholders it will take to deliver the RES, looks at how this links to otherstrategies and provides an indication of the resources available to achieve this, as a first step in the production of a RESImplementation Plan.

11a. Links to other regional strategies

Given the huge importance of economic growth to the wider sustainable development of the region, to businesses, theenvironment and the overall quality of life of people and communities, the RES must inform and support the range of otherstrategies in the region under the umbrella of the East Midlands Assembly's Integrated Regional Strategy and add value to sub-regional and local level strategies.

Section eleven

Integrationand delivery

CHART 7 : The Integrated Regional Strategy

Economicobjectives

Socialobjectives

Environmentalobjectives

Spatialobjectives

THE REGION’S VISION

“The East Midlands will be recognised as a region with a high quality of lifeand sustainable communities that thrives because of its vibrant economy,rich cultural and environmental diversity and the way it creatively addressessocial inequalities, manages its resources and contributes to a safer, moreinclusive society.”

The Integrated Regional Strategy (IRS) framework aims to ensure that policies and strategies are not prepared in isolation but in a

compatible and integrated way. The Regional Economic Strategy, Regional Spatial Strategy, Regional Environment Strategy and the

family of social strategies - Investment for Health, Housing and the Regional Cultural Strategy (which is currently under review) -

have been developed within the context provided by the IRS Framework and together will help the region move towards its vision,

objectives and priorities. The RES sits firmly within that framework and complements all other regional strategies. Links with other

Regional Strategies are summarised in Annex D.

11b. Links to inter-regional strategies

Smart Growth - Midlands Way (SGMW)

The Smart Growth - Midlands Way initiative is a collaborative inter-regional growth strategy across the East and West Midlands. It

outlines a bespoke Midlands response to the challenges of the Government's Sustainable Communities Plan and national

productivity drivers. Smart Growth is about how the Midlands can help its own communities, whilst also contributing to the delivery

of national targets and objectives.

The work has been led by the two Midlands RDAs - Advantage West Midlands, and emda - working with the two Regional

Assemblies and Government Offices. Smart Growth seeks to reinforce and assist in the delivery and implementation of existing

regional policy. It neither replaces nor duplicates these strategies; rather it provides a vehicle for accelerated delivery, through

improved linkages and cross boundary working. Initial indications have suggested that such an approach could bring real

opportunities and benefits for the Midlands. The development of the growth strategy is on-going. In its present form, it identifies key

priorities for action which relate to three theme areas:

� SMART Renaissance - which relates to regeneration activity;

� SMART Productivity - which relates to improving productivity;

� SMART Connections - which relates to improving infrastructure.

The outcomes and evidence of RES revision processes in the East and West Midlands will be used to refine and further inform the

development of SGMW.

The Northern Way

The Northern Way is being led by the three Northern Regional Development Agencies (Yorkshire Forward, One NorthEast and the

Northwest Regional Development Agency), and the objective is to develop a long-term strategy for growing the economy of the

whole of the North of England looking to 2025. The Northern Way's Steering Group published a Growth Strategy report in

September 2004 which identifies the changes required and prioritises actions. A key focus is the £30 billion output gap between

the North and South which is shown to be widening. The Northern Way aims to unlock the potential of the North by:

� adding value through pan-regional working;

� building on combined assets and networks;

� creating a world-class critical mass.

A key element of the Northern Way is the work being taken forward by eight City Regions which have developed City Region

Development Plans. The Sheffield City Region includes parts of Derbyshire and Nottinghamshire.

11c. Delivering the RES: Resources

Successful delivery of this Strategy is dependent upon the commitment and support of many people, businesses and organisations

in the region. The priority actions will be delivered by the continuation of existing activity or redirection of activity to better align with

RES priorities. However, many actions will also need direct financial investment. The East Midlands is a £66 billion economy. If a

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153

larger share of the investment in the economy from public and private sources can be mobilised behind RES objectives, the region

is more likely to achieve its vision of becoming a flourishing region. We know that in 2003/04, around £23 billion could be attributed

to public expenditure in the East Midlands, of which around £6.7 billion was spent by local government. Chart 8 below shows how

this is broken down by activity.

More than three quarters of the

identifiable public expenditure in the

region is on education and training,

health and public order and safety -

these are all important in furthering the

economic wellbeing of the region, but

they will not all directly contribute to

many of the actions in the RES.

Resources for many of the actions must

therefore come from private support and

investment. The proportion of public

expenditure devoted to economic

development is small - around 1.5%,

reinforcing the point that the Strategy

cannot be delivered and the vision

cannot be achieved without inputs from

those responsible for the remainder of

public expenditure and the billions of

pounds of business spending in the

region each year. This investment will

take the form of, for example, property,

plant and equipment, IT, research and

development and training - all of which

can be directed in support of RES

priorities.

The RES Implementation Plan will map

those organisations whose contribution

will be critical to the successful delivery

of the RES, including where possible

details of resources to be invested.

Section eleven

154

CHART 8 : Identifiable Public Expenditure in theEast Midlands, 2004-05

Source: HM Treasury, Public Expenditure Statistical Analysis (PESA), May 2006.

Section eleven

155

Section eleven

156

1Employment,learning andskills

Connexions,Education businesspartnerships,EMBF, emda, GOEM, Local authorities,LSCs, SSCs,SSPs.

emda, HEIs, LSC, SSCs,SSPs, Private trainingproviders.

Business supportorganisations, EMBF, EMCBE,emda,EM ProcurementCentre of Excellence,HEIs,JobCentre Plus,SFBN,SSPs.

DFES: PSA 1DFES: PSA 2DFES: PSA 5

DFES: PSA 10DFES: PSA 11

DTI: PSA 1 DEFRA: PSA 5

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

1a. Developingthe skill levels ofthe current andfuture workforce

1b. Stimulatingbusinessdemand forskills

Engaging schools and collegeswith businessesEquip school and college leavers with theskills and knowledge that businessesrequire by:� developing stronger linkages between

education providers and employers;� working with businesses to ensure that

every young person has access to aweek’s work experience every yearfrom the age of 14;

� improving the delivery of the provisionand coordination of STEM (Sciences,Technology, Engineering and Maths)subjects, along with work-readiness ofschool leavers.

Developing adult workforce skills(Pathways for Learning)Increase the proportion of the adultworkforce studying for and gaining newqualifications by developing clear learningpathways for people in work to progressfrom Skills for Life through to Foundationdegrees through:� improving the integration of existing

qualifications;� providing access to further opportunities

to develop high level skills that arerelevant to the economy;

� providing meaningful information toyoung people and those in work aboutthe likely outcome of their chosenlearning pathways including informationon potential earnings, careeropportunities and further skills needs.

Stimulating skills demandEncourage employers to stimulate demandfor high level and transferable skills by:� promoting the adoption of innovative

working practices, including effectivework organisation and employeedevelopment;

� using public procurement to promoteskills development;

� providing support and ensuring easyaccess to information about how todevelop the skills of the workforce(including a published network of namedcontacts in further and higher educationthat businesses can contact directly todiagnose and discuss their needs);

� providing consistent and relevantbusiness support, advice and guidance.

� Working with partners to improvemanagement skills in the region.

11d. Indicative delivery plan

Structural theme 1 : Raising productivity

Section eleven

157

2Enterpriseand businesssupport

Business supportorganisations,EMBF,emda,Jobcentre Plus,Local authorities,LSCs,Training providers,SSPs.

Business supportorganisations,emda,HEIs,Jobcentre Plus,Local authorities,LSCs,Training providers,SSPs.

Business supportorganisations,EMBF (FSB),emda,HEIs,Industry groups,Local authorities,SBS,SSPs.

Business supportorganisations,EMBF (FSB),emda,Industry groups,Local authorities,SBS,SSPs.

Business supportorganisations,EMBF (FSB),emda,Industry groups,Local authorities,SBS,SSPs.

Business supportorganisations,emda,MAS,SSPs.

DTI: PSA 1

DTI: PSA 1

DTI: PSA 6DEFRA: PSA 5

DTI: PSA 6DEFRA: PSA 5

DTI: PSA 6DEFRA: PSA 5

DTI: PSA 6

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

1c. Improving theinfrastructure andresponsiveness ofskills supply

1d. Improving theinfrastructure andresponsivenessof skills supply

2a. Building anenterpriseculture

2b. Creating adynamic SMEbase

2c. Supportinginnovation &diversification inmanufacturing

Matching skills provision toemployer demandEnsure that training providers prioritiseresources and develop the capacity todeliver the skills required by employers in agrowing economy.

Exploiting the opportunity ofHigher EducationEnsure that adult learners, irrespective ofage, gender or location, have access toacademic and vocational qualifications toLevel 4 and above whilst remainingengaged in the workforce by:� developing lifelong learning networks

to link further and higher education toimprove access to skills provision;

� supporting HEIs to increase the flexibilityof their offer so more people already inthe workforce have an opportunity togain higher level skills.

Harness a culture of enterpriseCreate a continuous path of enterpriseeducation and awareness available to all inthe region, linked to the provision of start-upassistance for those who wish to access it.

Targeted provision to improvebusiness creationCreate a coordinated long-term campaignto develop enterprise skills, raise the profileof enterprise and help people identifyopportunities; focusing on people aged35-55, particularly women. The 35-55 agegroup is proven to have the capital,competence and ideas to successfullystart a new business.

Increase business survival Provide best practice support, linked to theenterprise campaign, to ensure that allpeople are offered:� consistent high quality advice prior to

setting up their businesses, irrespectiveof where they are based in the region,that is tailored to their individual needs;

� ongoing business support as theirbusiness grows that is targeted atincreasing survival rates amongstbusinesses that are 12 to 36 months old.

Supporting innovation &diversification in manufacturingThrough the national ManufacturingAdvisory Service, target support to firmsthat are ready and willing to innovate andassist their investment in diversifying theirproducts, processes or markets and linkthese firms to wider Business Link supportfor growth and skill development.

Section eleven

158

2Enterpriseand businesssupport

Business supportorganisations,EMBF (FSB),emda,HEIs,Industry groups,SBS,SSPs.

Business supportorganisations,EMBF,emda,Industry groups,Local authorities,SSPs.

Business supportorganisations,EMBF,emdaLocal authorities.UKTI,

Business supportorganisations,EMBF, emda,Industry groups,Local authorities.SSPs,UKTI, URCs,

DCMS,emda,EM TourismDestinationManagementPartnerships,Local authorities.

DTI: PSA 6DEFRA: PSA 5

DTI: PSA 6DEFRA: PSA 5

DTI: PSA 1DTI: PSA 11

DTI: PSA 11

DCMS: PSA 3

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

2d. Overcomingbarriers to SMEgrowth

2e. Supportingfirms to becomeinternationallycompetitive andattractinginwardinvestment

2f. Building thevisitor economy

Providing high quality businesssupportDevelop an integrated regional businesssupport network that:� helps SMEs to overcome the knowledge

based barriers that can prevent themfrom maximising growth opportunities;

� provides access to relevant advice andguidance to businesses as they growand is easy for businesses to understand and access.

Improving access to financeCreate a regional 'escalator' of fundingsources, from both the public and privatesectors, so that businesses have access toappropriate finance as they grow, deliveredthrough:� programmes which ensure they are

‘investment ready’ to maximise availableopportunities;

� targeted financial support packages forspecific business groups.

Increasing international tradeSupport businesses to increase theiroverseas trade by:� providing tailored export services,

including specialist support forbusinesses looking for opportunities inBrazil, Russia, India and China;

� devising programmes to developbusiness skills in areas such asinternational sales and marketing,language and culture;

� assisting companies, where appropriate,to internationalise through offshoring,joint ventures and strategic partnerships.

Targeting foreign direct investmentTarget FDI activity on those market sectorsthat are likely to contain knowledge driven,R&D intensive investments and back thisup with:� specialist support to the investing

companies to their local needs, includingaftercare support;

� specialist support that meets the needsof those larger companies that falloutside mainstream business supportmechanisms.

Increasing visitor spend� Target regional and sub-regional

marketing and promotion with the aim ofincreasing visitor spend, particularly fromstaying and inbound visitors.

� develop a coordinated campaign toencourage investment in public realm,conferencing and business tourismfacilities.

Section eleven

159

2Enterpriseand businesssupport

3Innovation

Culture East Midlands,EM CulturalObservatory,emda, Local authorities,SSPs.

EMBF,EM ProcurementCentre of Excellence, Local authorities,GOEM.

Culture East Midlands,East Midlands Tourism,EMBF,emda,EM ProcurementCentre of Excellence, GOEM,Local authorities,Sport England.

Business supportorganisations, EMBF,emda,HEIs,Industry groups,Innovation EastMidlands,SSPs.

Business supportorganisations, EMBF, emda,GOEM, HEIs, Innovation EastMidlands, SSPs.

DCMS: PSA 3

DCLG: PSA 4

DTI: PSA 6

DTI: PSA 2

DTI: PSA 6

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

2g. Harnessingculture in theEast Midlands

2h. SupportingSMEs to harnessbusinessopportunitiessuch as publicprocurement

3a. IncreasingInvestment inR&D

Targeting growth of creative &cultural industries � Protect, conserve and enhance the key

regional cultural and historic assets tomaximise their contribution to theregional economy;

� Support the cultural sector to createopportunities for community participationand to develop social capital.

Maximising the benefits of publicprocurementDevelop a Regional ProcurementOpportunities Plan aligned with theNational Procurement Portal to open upmore market opportunities, in the regionand nationally, to regional businesses.

Maximising the benefits of theLondon 2012 Olympic andParalympic GamesDevelop a 2012 Action Plan which:� provides businesses with the information

and support they need to bid for contractsassociated with the 2012 Games;

� optimises the opportunities from the2012 Games by providing dedicatedsupport/advice to SMEs bidding forcontracts, and the targeted marketingof training facilities;

� builds the region's sports infrastructureto attract elite athletes as well as benefitlocal communities, so a legacy in termsof skills, health, culture andparticipation remains.

Increasing research anddevelopmentProvide targeted support to fosterinnovation within businesses andencourage them to undertake moreresearch and development with the aim of:� creating new market opportunities;� developing innovative new products,

processes and services;� maximising the opportunities offered by

existing support mechanisms (such asR&D tax credits) and improving accessto finance for R&D.

Developing research excellence� Develop research excellence so the

region can compete for and benefitfrom a larger share of public andprivately funded R&D;

� enhance the growth and investment inthe region's research and sciencebase, including the universities.

Section eleven

160

3Innovation

Business supportorganisations, EMBF, emda,HEIs,Industry groups,Innovation EastMidlands.

Business supportorganisations, EMBF, emda,EMRA, HEIs,SSCs,SSPs.

Business supportorganisations,EMBF, emda, HEIs,Innovation EastMidlands,SSPs (GNP).

Business supportorganisations,EMBF,HEIs,Innovation EastMidlands,Local authorities.

DTI: PSA 6

DFT: PSA 2DEFRA: PSA 2

DTI: PSA 2

DTI: PSA 2

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

3b. Helpingexistingbusinessesdeploytechnologiesand processes

3c. Resourceefficiencythrougheffective use oftechnology andmanagementpractices

3d. Translatingscientificexcellence intobusinesssuccess

Developing and applying newtechnologies� Provide assistance in the development,

promotion and implementation of newenabling technologies, products andprocesses, utilising support services thatare aligned with the needs of businesses;

� establish collaborative networksbetween researchers, businesses,venture capitalists to ensure emergingtechnologies are brought to market.

Providing business support onresource efficiencyIntroduce a range of resource efficiencybusiness support measures that enableregional businesses to adopt leading bestpractise related to:� avoidance, reduction and improved

management of waste;� creation of new markets for innovative

products and services derived from waste;� more productive and efficient use of

energy, water and materials;� promotion and implementation of

environmental and sustainable benefitsto businesses.

Maximising the impact of ScienceCity NottinghamMaximise the impact of Nottingham'sScience City designation to the benefit ofthe wider region particularly in science andtechnology focused infrastructuredevelopment and regeneration by:� encouraging greater and more effective

collaborative working between theNottingham Universities, other researchestablishments and businesses to buildthe infrastructure, expertise andknowledge needed to attract and retainhigh value science and technologybased businesses;

� extending outwards from Nottingham todevelop regional research excellence.

Commercialising scientificexcellence through facilitatedbusiness collaborationIntroduce more effective initiatives tofacilitate greater collaboration betweenbusinesses and the regional researchcommunity, including the universities, withthe aim of:� matching research capability to business

needs, leading to increasedcommercialisation of the region'sscientific excellence;

� exploiting the benefits associated withwider intellectual property rights in orderto develop innovative new products andservices and create new marketopportunities;

� providing specific business supportthroughout the commercialisation process.

Section eleven

161

3Innovation

Business supportorganisations,emda, SSPs,HEIs,Local authorities,URCs.

Business supportorganisations,EMBF,emda,EMUA,HEIs,Innovation EastMidlands,LSC,Sector representatives,SSCs,SSPs.

DTI: PSA 2

DTI: PSA 1DTI: PSA 2

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

3e. Growing theregion's keysectors

Development of land and propertyDevelop land, property and facilities whichmaximise opportunities for collaborativeinnovation activities and inward investmentby providing quality sites and buildingswhich support enterprise development.Proposed developments should: � be linked to RES priority sectors;� maximise clustering benefits;� improve links between academic

institutions and businesses;� be supported by the work of Innovation

East Midlands and blueprint;� encourage sustainable building design.

Growing the region's key sectorsEnsure that the priority sectors (transportequipment, construction, food and drinkand healthcare) are considered in theimplementation of other actions in the RESto support growth, address skills needsand focus on efficiency and excellence,for example:� by ensuring skills and training providers

are matching their provision to the needsof these sectors;

� by encouraging business supportorganisations to consider these sectorsin the setting of their priorities anddelivery of their services.

4Transportand logistics

Department forTransport,emda,EMRAF,EMRA (RSS),Local transportauthorities,Transport operators.

DTI: PSA 2DFT: PSA 1DFT: PSA 3

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

Infrastructure,accessibilityand connectivity

Improve transport connectivityand accessibilityTo maximise the contribution the region'stransport infrastructure and services maketo the delivery of the RES objectives, thefollowing actions will be promoted byregional partners to be taken throughnational agencies, RSS and RTS, LocalTransport Plans and DevelopmentFrameworks, and transport operators:� improve inter and intra-regional

connectivity by strengthening linksbetween the regions main urban centres,improving reliability on key routes forpassengers and freight, and addresspoor connectivity or capacity to keycentres in other regions, includingLondon, Leeds, Birmingham, andManchester;

� improve international accessibility byimproving surface access to NEMA andother airports serving the region(including Robin Hood DoncasterSheffield), and strengtheningconnectivity to mainland Europe by arange of modes, including rail via London;

Structural theme 3 : Ensuring sustainability

Section eleven

162

4Transportand logistics

Airport companies,emda,Local authorities,NEMA,SSPs.

Department ofTransport,EMRA (RSS),Local authorities.

DTI: PSA 1DFT: PSA 3

DFT: PSA 1DFT: PSA 3

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

� support regional regeneration andgrowth by improving access from allcommunities to employment andmaximising the impacts of economicdrivers and growth areas, unlockinginvestment sites in disadvantagedcommunities, and addressinginequality by improving accessibility;

� contribute to environmental, quality oflife, and wellbeing indicators byimplementing demand managementmeasures, and access to recreation,sport, and cultural facilities.

Maximise benefits of NottinghamEast Midlands Airport, and RobinHood AirportRealise the economic opportunities andbenefits of NEMA and Robin Hood Airport.This includes recognising the need toaddress and monitor key environmentalissues to help secure long-termsustainable growth. Key issues for actionby local, regional and national partners are:� surface access improvements to

reduce the local impact of transportmovements, and enable allcommunities to access employmentand training opportunities;

� secure employment land supply insurrounding urban areas through localdevelopment frameworks and strategies;

� ongoing partnership working to ensureskills, labour supply, and trainingopportunities help meet future Airportneeds through groups like the NEMAEmployers Forum;

� ongoing mitigation and technological responses to help reduce local noiseand wider environmental impacts of theforecast growth in passenger andfreight activity.

Travel demand managementSupport regional competitiveness byimproving transport efficiency andreducing road congestion by developinginnovative approaches to behaviouralchange, travel demand management, andintegration, including exploring measuresof congestion charging and othermeasures to realise economic, wellbeingand environmental benefits.

Section eleven

163

5Energy andresources

emda,EMRA, EMBF, GOEM, HEIs,Local authorities,Private sector energyutility companies.

CABE,EMBF,EMCBE,emda,EMRA,GOEM,HEIs,Housing associations,Local authorities,Private sector energyutility companies,REM.

Carbon Trust,EMBF, EMRA, Private sector energyutility companies,Local authorities,NISP,SSPs.

Business supportorganisations,Carbon Trust,EMBF,EMRA, Envirowise,HEIs,NISP, WRAP, SSPs.

Business supportorganisations,CABE,EMBF,EMCBE,emda,EMRA,Local authorities,Natural England, Private sector energyutility companies,REM,SSPs.

DEFRA: PSA 2

DEFRA: PSA 6

DEFRA: PSA 2

DEFRA: PSA 6

DEFRA: PSA 2

DEFRA: PSA 2

DEFRA: PSA 2

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

5a. Respondingto the challengeof climatechange

5b. Exploitationof new andgrowing lowcarbon markets

5c. Ensuring anInfrastructurefor a low carboneconomy

Adaptation to climate changeEnsure that public and private sectorleaders understand and respond to theimpacts of climate change by:� developing a regional climate change

adaptation and mitigation strategy/action plan;

� providing support to businesses toundertake climate change risk analysis.

Reducing the demand for energyand resourcesEnsure that our need for energy andresources is minimised by:� investing in better management and skills� driving change through public

procurement;� encouraging use of low carbon

technologies;� stimulating clean design.

Utilising renewable energytechnologiesMaximise the economic and environmentalbenefits of renewable energy technologiesby promoting their development anddeployment through:� the creation of a regional renewables

investment plan;� promote demand for and showcase

renewables technologies;� support supply chain development to

ensure regional economic benefit fromrenewables investments.

Exploiting low carbon technologiesEnsure that businesses are well placed toexploit the opportunities presented by thegrowing global marketplace for low carbonproducts/services through:� regional awareness raising and

communications campaign;� the provision of dedicated low carbon

business support;� creating stronger linkages between the

private sector and Higher EducationInstitutions active in low carbonresearch and development.

Energy and waste capacityPromote the development of a moresecure, diverse and sustainable energyand waste infrastructure and innovativeapproaches to providing energy and wasteservices within our economy by:� promoting and investing in renewable

and low carbon energy generation;� promoting and investing in diverse and

localised energy supply;� promoting and investing in diverse and

localised waste management;� influencing private sector utilities and

regulators concerning the capacity andlongevity of existing supply anddistribution and waste managementinfrastructure.

Section eleven

164

6Environmentalprotection

Business supportorganisations, Carbon Trust, EMBF,EMRA,English Heritage,Environment Agency,Local authorities,Natural England,Private sector energyutility companies.

CABE,EMCBE,Housing associations,Local authorities, REM,RHB Partners,URCs.

Business supportorganisations,EMRA,English Heritage,Environment Agency,Envirowise, HEIs,Local authorities,NISP.

CRT,EMRA,emda,English Heritage,English Partnerships,Environment Agency,Local authorities,Natural England,National Trust,SSPs.

emda,EMRA,English Heritage,English Partnerships,Environment Agency,Housing associations,Local authorities,Natural England,SSPs.

DEFRA: PSA 2

DEFRA: PSA 2

DEFRA: PSA 2

DEFRA: PSA 3

DEFRA: PSA 2

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

6a.Protecting andenhancing ourenvironmentalInfrastructureto ensuresustainableeconomicgrowth

6b. Protectingand enhancingGreenInfrastructurethroughenvironmentalstewardship

Environmental infrastructurePromote innovative approaches to supplyand demand management (relating totravel, energy, water and materials) toreduce pressures on environmentalinfrastructure by:� improve resource efficiency (see

priority action 3c);� addressing travel demand

management (see priority action 4a-3);� delivering sustainable energy and

resource management (see Energy andResources section).

Sustainable constructionEnsure that investments in the builtenvironment integrate climate changeconsiderations through:� raising awareness of climate change

factors on the built environment (seepriority action 5a);

� applying high quality design andenvironmental standards for alldevelopments (refurbishments and newbuilds) receiving public sector support;

� promoting and replicating models ofleading construction best practice, suchas Sherwood Energy Village andAttenborough Nature Reserve.

Cleaner production processesEncourage the development and adoptionof cleaner production processes and shiftconsumption towards goods and serviceswith lower environmental impacts through:� assisting businesses with the provision

of clean production process audits;� building links between the region's

Higher Education Institutions andbusinesses.

Improve damaged environments� Improve natural environments, damaged

as a legacy of former industrial anddevelopment activity particularly wherethis is a barrier to investment in theregion, especially in the coalfields;

� encourage sustainable agriculture whichenhances and protects the countrysideand protects the region's biodiversity.

Protect and enhance greeninfrastructureProtect and enhance local greeninfrastructure at the local and regionallevels to contribute to more sustainablecommunities and enhance quality of life by:� encouraging the integration of green

infrastructure issues into the planningsystem, where possible;

� working with developers and landowners to ensure that opportunities fornew or improved green infrastructureare integrated into physicaldevelopment schemes;

� realise the environmental, social andeconomic potential of greeninfrastructure.

Section eleven

165

7Land anddevelopment

Local authorities;English Partnerships,EMRA;Private sectordevelopers;Urban regenerationcompanies.

Department ofTransport,emda,Local authorities,Private sectordevelopers,Private sector utilitycompanies,SSPs.

emda,English Partnerships,Local authorities,Private sectordevelopers,Urban RegenerationCompanies,SSPs.

DWP: PSA 3

DWP: PSA 3

DTI: PSA 1

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

7b. Developmentland

Secure the supply of qualityemployment landEnsuring and safeguarding an appropriatesupply of quality employment land byproviding supportive local and regionalplans and policies. Key actions include:� maintaining an up to date regional

picture of employment land supply andquality issues by monitoring, andbuilding on the results of local,sub-regional, and regional studies;

� bringing forward new sites, upgradingexisting sites, and where necessary inorder to further regenerationobjectives, promoting the redevelopmentof commercially unattractive sites forother economically beneficial uses;

� undertaking master planning, andwhere appropriate use EnvironmentalImpact Assessments (EIA), exercisesto provide an holistic approach to thesupply of employment land;

� preparing relocation strategies forbusinesses affected by redevelopmentproposals;

� encouraging job creation throughprivate sector development and thetargeting of public sector resources forpriority sites.

Infrastructure for employmentrelated schemesEnsure appropriate levels of infrastructureincluding transport, utilities, green and ICTfor employment-related schemes, through:� assessing regional deficiencies and

identifying needs for utility provisionand ICT;

� assessing and planning for infrastructureneeds on proposed sites fordevelopment, using development briefsand local planning decisions to ensureappropriate provision;

� ensuring proactive investment by thepublic sector where identified gaps inprovision exist;

� assess potential environmental impactsusing Environmental ImpactAssessments (EIA) and environmentalcapacity studies.

Previously developed land andbuildingsIncrease the re-use of previously developedland through an appropriate mix of actionsincluding site remediation, reclamation andredevelopment, and ensure that effectiveuse is made of the existing stock ofbuildings. Key actions include:� rolling out the Brownfield Land Action

Plan for the East Midlands;� identifying appropriate previously used

sites through Local DevelopmentFrameworks to bring forward economicinvestment consistent with the RESand RSS;

� ensuring that the legacy of severeproblems of environmental degradationcaused by coal mining continues to beaddressed.

Section eleven

166

7Land anddevelopment

Culture East Midlands,DCMS,emda,EMRA,EMRAF,Housing associations,Local authorities,SSPs.

Housing associations,Housing marketrenewal pilot projects,Local authorities,RHB Partners,SSPs.

EMRAF,Local authorities,Housing associations,Private developers,RHB Partners.

DCLG: PSA 7

DCLG: PSA 5DCLG: PSA 7

DCLG: PSA 5

8CohesiveCommunities

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

7c. Housing

Business supportorganisations,emda,Engage EM,GOEM,Local authorities,R3N,SSPs,Voice EM.

HO: PSA 8HO: PSA 9

None Promoting Social capitalSupport initiatives which mobilise existingsocial capital and create bridges and linksbetween different groups includingvolunteering opportunities.

Structural theme 3 : Achieving equality

SUBPRIORITIES

PRIORITY ACTIONS KEYPARTNERS

LINK TO PSATARGETS

STRATEGICPRIORITIES

Supporting infrastructure forhousing growthIn areas of housing growth, ensureprovision of transport, economic, culturaland community infrastructure, includinggreen infrastructure, to support the creationof sustainable and integrated communities.This will be achieved by:� using development briefs and planning

policies and decisions to ensureprovision of adequate land supply foremployment and community uses tosupport housing growth;

� assessing and addressing thedeficiencies & needs for utility provisionto service the new development.

Regeneration in areas of lowhousing demand Ensure that regeneration and economic,social and environmental inclusion benefitsare integral to future developments in areasof low housing demand through theprovision of new and improved housing,community and economic infrastructure.Key actions are:� build on the experience of ongoing

best practice, such as Meden ValleyMaking Places, and support theHousing Market Renewal pilot projectswhich will test out the Regional PolicyFramework for housing market renewal;

� develop a greater understanding ofboth the causes and the solutions tohousing market failure in the region andaddress them through regional andlocal investment strategies.

Range of housing provisionImprove the range, mix and quality ofhousing in the region, including the renewalof existing housing stock, through theRegional Housing Investment Strategy,through regional and local planning policies,and development control decisions.

Section eleven

167

8CohesiveCommunities

9Economicrenewal

Culture EM,emda, EM Tourism,GOEM,Local authorities,Social economypartners,SSPs.

emda,GOEM,Local authorities,Social economypartners,SSPs.

Business supportorganisations,emdaLocal authorities,Local businesses,LSC,Jobcentre Plus,Social economypartners,SSPs.

Business supportorganisations,emda,Jobcentre Plus,LSC, Social economypartners,SSPs.

Department ofTransport,EMRA,Housing associations,LGEM,Local authorities,SSPs,URCs.

Business AgainstCrime networks,Community SafetyPartnerships,EM Business Crime Forum,GOEM,Local authorities,NOMS,Police,SSPs.

DCMS: PSA2HO: PSA 9

DCLG: PSA 1DCLG: PSA 4HO: PSA 9

DFES: PSA 5DFES: PSA 10DFES: PSA 11DCLG: PSA 1

DTI: PSA 6DCLG: PSA 1

DTI: PSA 6

HO: PSA 6

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

None

9a. Buildinglocal capacity,resources &support

9b.Reviving localinfrastructure &environments

Collaboration to encourage participationEncourage collaboration between cultural,leisure and tourist bodies to encouragecommunity participation, build social capitaland contribute to community cohesion

Develop Cohesive communities Support the development of cohesivecommunities through Local Area Agreements.

Effective engagement andinvolvement of local businessesand residentsEnsure that people and businesses in localcommunities have the skills and capacityto develop local economic renewalsolutions through:� the provision of economic development

skills training;� the provision of economic/enterprise

coaches and business brokers;� building social capital between the

statutory, business and communitysectors.

Inclusive business supportEnsure that business support is responsiveto the needs of all communities and under-represented groups through:� integrating specialist needs into the

regional business support model;� support for enterprise coaching models

in the most disadvantaged areas.

Built and green environmentsImprove the quality of the built and greenenvironments to enhance local economicprospects through:� applying best practice standards for

design and construction (see priorityaction 6a-2 in the Environmental Protection section);

� working with developers to ensure theintegration of green infrastructurefactors and improving the public realmin development briefs.

Addressing crimeReduce the impacts of crime oncommunities and businesses throughneighbourhood and business crimereduction initiatives and activities to reducere-offending.

Section eleven

168

9Economicrenewal

10Economicinclusion

East Midlands Centrefor Procurement Excellence,English Partnerships,FE and HE institutions,Housing associations, Jobcentre Plus,Local authorities,LSC,Regional and localhealth bodies,Social economypartners,SSPs.

Business supportorganisations,CDFA, CDFIs, EMBF, emda,Financial institutions,Local authorities,Social economypartners,SSPs.

FE colleges,GOEM,Jobcentre Plus, Local authorities,LSC,Social economypartners,SSPs.

EMBF,Housing associations,Jobcentre Plus,Local authorities, LSC, Social economypartners,SSPs,URCs.

DTI: PSA 6

DTI: PSA 6DCLG: PSA 1

DWP: PSA 3DFES: PSA 10

DWP: PSA 3

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

9c. Stimulatingnew marketsand investment

10a.Employability

New markets and enterpriseopportunitiesStimulate new local markets and enterpriseopportunities by unlocking the potential oflocal procurement by:� encouraging local public authorities to

adopt procurement approaches whichdeliver local, social, environmental andcommunity benefits;

� supporting the development of socialenterprises, and the broader Voluntaryand Community Sector to deliverservices whilst improving theeconomic, social and environmentalcapacity of a local area;

� embedding large scale employers inbusinesses into local areas throughsupply chain diversity initiatives.

Improve access to financeImprove access to finance for allentrepreneurs irrespective of location,personal characteristics and type ofbusiness by:� providing an appropriate range and

specification of financial servicesproducts tailored to their needs;

� influencing mainstream financiers;� investing in community development

finance instruments (CDFIs);� promotion and coordination of CDFI

investments.

Enhance employability of the mostdisadvantagedImprove the employability of those withoutskills and qualifications through:� the provision of ‘Skills for Life’ (including

ESOL (English for Speakers of OtherLanguages), vocational and coreemployability skills);

� encouraging the take up of Level 2qualifications.

Address worklessnessAddress persistent and high levels ofworklessness in communities by :� connecting local people to job

opportunities created by public sectorinvestment in key infrastructure projects;

� encouraging private sector developersand employers to recruit fromunderutilised local labour sources;

� connecting people in areas of limitedopportunity to areas of growth;

� supporting innovative solutions to longterm unemployment such as work trials,peer mentoring schemes andintermediate labour markets.

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10Economicinclusion

EMBF,emda,Jobcentre Plus,LSC,SSPs.

Business supportorganisations, Department of Health,EMBF, emda, EM Public Health TaskGroup,Local authorities,SSPs.

Business supportorganisations, Department of Health,EMBF, emda,EM Public Health TaskGroup,Jobcentre Plus,Local authorities,SSPs.

Business supportorganisations,Connexions,Education businesspartnerships.EMBF, emda, EMUA,FE colleges, HEIs,Local authorities,Prowess, Schools, SSPs,

HO: PSA 9

DWP: PSA 3

DWP: PSA 3

DTI: PSA 6DWP: PSA 3

PRIORITY ACTIONSSUBPRIORITIES

STRATEGICPRIORITIES

KEYPARTNERS

LINK TO PSATARGETS

Improving the diversity of theworkforceWork with employers to increase thediversity of the East Midlands’ workforceand address the under representation ofdifferent groups in work by:� developing a regional campaign to

demonstrate the business case fordiversity;

� providing support to businesses toundertake diversity assessments anddevelop action plans;

� creating and promoting an EastMidlands’ diversity quality mark foremployers.

Working with employers to improvethe health of the region's workforceEnsure that employers are informed on thedetrimental effects of poor health onbusiness performance and take steps toimprove and protect the health of theiremployees by:� promoting the benefits of a healthy

workforce through business supportservices;

� working through the Investment forHealth Strategy to promote healthy workforce initiatives.

Address ill health as a barrier toemployabilityEnsure that those who experience poorhealth as a barrier to employment aresupported in entering the labour market inpositions consistent with their personalcircumstances. This will be achieved byensuring that employment supportactivities in the region take account of thevarying health needs of these groups.

Develop entrepreneurship skillsEnsure the region consistently generatesentrepreneurs from all sections of society by: � promoting entrepreneurship as a viable

career choice through targetedawareness raising activities (seepriority action 2b-1 under the Enterpriseand Business Support section);

� integrating entrepreneurship at all levelsof the education curriculum (schools, FEand HE) and creating effective linksbetween education institutions andbusinesses;

� providing business support appropriateto all sections of society (see the priorityaction 9a-2 under Economic Renewal).

10b. Achievinga healthyworkforce

10c.Enterprisingpeople

11e. RES priority actions and PSA targets

The RES must assist Public Sector partners in the delivery of Public Service Agreements (PSAs). Each PSA target represents a

step change in the level of quality of a specific service, or an improvement in the lives of people in the East Midlands.

All priority actions will assist in the delivery of three overarching PSA Targets:

DTI: PSA 7 Make sustainable improvements in the economic performance of all English regions by 2008 and

(Shared with over the long term reduce the persistent gap in growth rates between the regions, demonstrating

HMT/DCLG) progress by 2006.

DEFRA: PSA 4 Reduce the gap in productivity between the least well performing quartile of rural areas and the

(Shared with DCLG) English median by 2008, demonstrating progress by 2006.

DCLG: PSA 5 Promote sustainable development across Government and the country as a whole as measured

(Shared with DEFRA) by achieving positive trends in the Government's headline indicators of sustainable development.

The delivery tables on pages 156-169 (section 11d) detail PSA target alignment for each RES priority action. Chart 9 below provides

full details of these Public Sector Agreements, organised by Government department.

Section eleven

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CHART 9 : PSA Targets by Government department

Department for Communities and Local Government

DCLG: PSA 1 Promote better policy integration nationally, regionally and locally; in particular to work with departments to

help them meet their PSA floor targets for neighbourhood renewal and social inclusion.

DCLG: PSA 2 Make sustainable improvements in the economic performance of all English regions by 2008 and over the

long term reduce persistent gap in growth rates between the regions, demonstrating progress by 2006. Joint

target with DTI and HM Treasury.

DCLG: PSA 3 Provide for effective devolved decision making within a framework of national targets and policies.

DCLG: PSA 4 Improve delivery and value for money of local services by:

� Introducing comprehensive performance assessments and action plans, and securing a progressive

improvement in authorities' scores;

� Overall annual improvements in cost effectiveness of 2% or more;

� Assisting local government to achieve 100% capability in electronic delivery of priority services by 2005,

in ways that customers will use.

DCLG: PSA 5 Achieve a better balance between housing availability and the demand for housing in all English regions

while protecting valuable countryside around our towns, cities and in the greenbelt - and the sustainability

of existing towns and cities - through specific measures to be set out in the SDA.

DCLG: PSA 6 All local planning authorities to complete local development frameworks by 2006 and to perform at or above

best value targets for development control by 2006 with interim milestones to be agreed in the SDA. The

Department to deal with called in cases and recovered appeals in accordance with statutory targets.

DCLG: PSA 7 By 2010, bring all social housing into decent condition with most of this improvement taking place in

deprived areas, and increase the proportion of private housing in decent condition occupied by

vulnerable groups.

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Department for Culture Media and Sport

DCMS: PSA 1 Enhance the take-up of sporting opportunities by 5-16 year olds by increasing the percentage ofschoolchildren who spend a minimum of two hours each week on high quality PE and sport.

DCMS: PSA 2 Increase significantly the take-up of cultural and sporting opportunities by new users aged 20 and abovefrom priority groups.

DCMS: PSA 3 Improve the productivity of the tourism, creative and leisure industries.

DCMS: PSA 4 Improve significantly the value for money of the Department's sponsored bodies, measured by a matrix ofNDPB indicators.

Department for Work and Pensions

DWP: PSA 3 Demonstrate progress by Spring 2006 on increasing the employment rate and reducing the unemploymentrate over the economic cycle.

Home Office

HO:PSA 6 Reduce the harm caused by drugs by:� reducing the use of Class A drugs and the frequent use of any illicit drug among all young people under

the age of 25 especially by the most vulnerable young people;� reduce drug related crime, including as measured by the proportion of offenders testing positive at arrest.

HO:PSA 8 To increase Voluntary and Community Sector activity, including increasing community participation, by 5%by 2006.

HO:PSA 9 Bring about measurable improvements in race equality and community cohesion across a range ofperformance indicators, as part of the Government's objectives on equality and social inclusion.

Department for Transport

DFT: PSA 1 Reduce congestion on the inter-urban trunk road network and in large urban areas in England below 2000levels by 2010.

DFT: PSA 3 Secure improvements to the accessibility, punctuality and reliability of local public transport (bus and lightrail) with an increase in use of more than 12% by 2010 compared with 2000 levels.

DFT: PSA 5 Reduce the number of people killed or seriously injured in Great Britain in road accidents by 40% and thenumber of children killed or seriously injured by 50% by 2010 compared with the average for 1994-98,tackling the incidence of disadvantage communities.

DFT: PSA 6 Improve air quality by meeting our National Air Quality strategy objectives for carbon monoxide, lead,nitrogen dioxide, particles, sulphur dioxide, benzene and 1-3 butadiene. (Joint target with DEFRA).

Department for Trade and Industry

DTI: PSA 1 Demonstrate progress by 2006 on the Government's long term objective of raising the rate of UKproductivity growth over the economic cycle, improving competitiveness and narrowing the productivity gapwith the US, France and Germany. Joint target with HM Treasury.

DTI: PSA 2 Improve the relative international performance of the UK's science and engineering base, the exploitation ofthe science base, and the overall innovation performance of the UK economy.

DTI: PSA 6 Help to build an enterprise society in which small firms of all kinds thrive and achieve their potential, with (i)an increase in the number of people considering going into small business, (ii) an improvement in the overallproductivity of small firms, and (iii) more enterprise in disadvantaged communities.

DTI: PSA 7 Make sustainable improvements in the economic performance of all English regions by 2008 and over thelong term reduce the persistent gap in growth rates between the regions, demonstrating progress by 2006.Joint target with DCLG and HM Treasury.

DTI: PSA 11 Deliver a measurable improvement in business performance of Trade Partners UK's customers; andmaintain the UK as the prime location in the EU for foreign direct investment. Joint target with FCO.

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Department for Environment, Food and Rural Affairs

DEFRA: PSA 1 Promote sustainable development across Government and the country as a whole as measured byachieving positive trends in the Government's headline indicators of sustainable development. Joint with DCLG.

DEFRA: PSA 2 Improve the environment and the sustainable use of natural resources, including through the use of energysaving technologies, to help reduce greenhouse gas emissions by 12.5% from 1990 levels and movingtowards a 20% reduction of CO2 emissions by 2010. Joint with DTI.

DEFRA: PSA 3 Care for our natural heritage, make the countryside attractive and enjoyable for all, and preserve biologicaldiversity by reversing the long-term decline in the number of farmland birds by 2020, as measured annuallyagainst underlying trends; bring into favourable condition by 2010 95% of all nationally important wildlifesites; and opening up public access to mountain, moor, heath and down and registered common land bythe end of 2005.

DEFRA: PSA 4 Reduce the gap in productivity between the least well performing quartile of rural areas and the Englishmedian by 2006, and improve the accessibility of services for rural people.

DEFRA: PSA 5 Deliver more customer-focused, competitive and sustainable food and farming as measured by the increasein agriculture's gross value added per person excluding support payments; and secure CAP reforms thatreduce production-linked support, enabling enhanced EU funding for environmental conservation and ruraldevelopment.

DEFRA: PSA 6 Enable 25% of household waste to be recycled or composted by 2005/06.

Department for Education and Skills

DFES: PSA 1 Raise standards in English and maths so that:� by 2004 85% of 11 year olds achieve level 4 or above, and 35% achieve level 5 or above with this

performance sustained to 2006;� by 2006, the number of schools in which fewer than 65% of pupils achieve level 4 or above is

significantly reduced.

DFES: PSA 2 Raise standards in English, maths, ICT and science in secondary education so that:� by 2004 75% of 14 year olds achieve level 5 or above in English, maths and ICT (70% in science)

nationally and by 2007 85% (80% in science);� by 2007 the number of schools where fewer than 60% of 14 year olds achieve level 5 or above is

significantly reduced;� by 2007 90% of pupils will reach level 4 in English and maths by age 12.

DFES: PSA 3 By 2004 reduce school truancies by 10% compared with 2002, and sustain the new lower level and improveoverall attendance levels thereafter.

DFES: PSA 5 Raise standards in schools and colleges so that:� between 2002 and 2006 the proportion of those aged 16 who get qualifications equivalent to 5 GCSEs

at Grade A*-C rises by two percentage points each year on average, and in all schools at least 20% ofpupils will achieve this standard by 2004 rising to 25% by 2006.

DFES: PSA 10 Improve the basic skill levels of 1.5 million adults between the launch of Skills for Life in 2001 and 2007, witha milestone of 750,000 by 2004.

DFES: PSA 11 To reduce by at least 40% the number of adults in the UK workforce who lack NVQ2 or equivalentqualifications by 2010. Working towards this; one million adults in the workforce to achieve NVQ2 andbetween 2003 and 2006.

HM Treasury

HMT: PSA 4 Demonstrate further progress by 2008 on the Government’s long-term objective of raising the rate of UKproductivity growth over the economic cycle, improving competitiveness and narrowing the gap with ourmajor industrial competitors.

HMT: PSA 5 As part of the wider objective of full employment in every region, over the three years to spring 2008, andtaking account of the economic cycle, demonstrate progress on increasing the employment rate.

HMT: PSA 6 Make sustainable improvements in the economic performance of all English regions by 2008, and over thelong term reduce the persistent gap in growth rates between the regions, demonstrating progress by 2006.

Section eleven

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PICTURED: WORKERS AT THE PORT OF BOSTON, LINCOLNSHIRE.

174

PICTURED:

Peepul Centre,Leicester.

175

Annexes

Annex A

176

Annex A:The Regional Indexof SustainableEconomic WellbeingThe Regional Index of Sustainable Economic Wellbeing (Regional ISEW) is a composite indicator of wellbeing that seeks to

measure different factors that relate to economic wellbeing and create a single performance indicator. Its model is effectively a

macro-level cost benefit analysis. Wherever possible, the components of the index have been selected to reflect the strategic

priorities of the RES.

It starts with the economic benefits derived from consumer expenditure. Then some economic adjustments are made for ensuring

that economies prudently invest for the future and manage their trade balances effectively. Depending on the actual year and state

of the economy these may involve extra economic costs. The value of social benefits are added that are not accounted for in

personal consumption figures, such as public expenditure on health and education as well as an estimate of the value of unpaid

domestic labour at home. In the Regional ISEW estimates of the value of unpaid voluntary work outside the home are also included.

Social costs are deducted such as expenditures that defend our quality of life rather than enhance it. These include factors such

as the cost of car accidents, crime, and family breakdown. In addition changes in the distribution of income are accounted for,

reflecting the diminishing marginal utility of money. Estimates of environmental costs are then made. These include water and air

pollution as well as estimates of the costs of climate change and ozone depletion. Further adjustments are made regarding the

management of renewable and non-renewable stocks of natural capital such as fossil fuels and natural assets, such as farmlands

and natural habitats. A list of components which make up the ISEW composite indicator are listed in chart 10 below.

CHART 10 : Components of ISEW

Consumer ExpenditureNet Capital GrowthChange in Net International PositionUnder Utilisation of Consumer Durables

Household Labour and VolunteeringNegative Effects of Income DistributionDivorce, Crime & Car AccidentsPublic Expenditure on Health & EducationDefensive Expenditure on Commuting

Costs of PollutionLong Term Environmental DamageLoss of HabitatsFarmland & Soil ErosionDepletion of Non-renewable Natural Resources

Economic benefitscosts & adjustments

Social costs andbenefits

Environmental costs

All of these domains, and the factors beneath them, have different trends over time and one of the benefits of a transparently

constructed indicator, such as Regional ISEW, is that they can be tracked individually. The Regional ISEW will be updated

periodically.

Regional performance

As chart 11 below shows, the Regional ISEW per capita has grown steadily during the last decade, at a slightly faster rate than

GVA per capita. The latest data shows that regional ISEW per capita is £8,953. This is 59.5% of GVA per capita in the region and

an increase from 55.7% in 1994.

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CHART 11 :Economic wellbeing and economic growth in the East Midlands 1994-2004

PICTURED: BROCKS HILL VISITOR CENTRE AND COUNTRY PARK, LEICESTERSHIRE.

Annex B:development principles

Physical development has a key role to play in helping to create a flourishing region, and the creation of sustainablecommunities. To help contribute to the RES, development proposals and decisions should have regard to the following‘development principles’. These will ensure that development is brought forward in an effective and sustainable manner, helpingto deliver the region's aspirations.

1. Through regional and local action and policy, the East Midlands will maintain a sustainable supply ofquality land and premises for new business, residential development and mixed uses.

� A range of opportunities will be promoted to secure the renaissance of urban areas; the development of sustainablecommunities in rural areas and the regeneration of priority sites, with the development of previously developed land a strongpolicy objective.

� Priority should be given to ensuring that high quality sites and buildings are provided for high growth and priority sectors ofthe economy, particularly knowledge intensive businesses.

2. The region will ensure that development contributes to wider economic objectives and regeneration toimprove the overall economic performance.

� Development policies and plans should work to reduce intra-regional economic disparities, and address those physical andspatial issues which support 'Productivity' and 'Equality' objectives, as well as 'Sustainability' objectives.

3. Development decisions will consider accessibility, proximity of labour supply, and the potential forgenerating or supporting agglomeration benefits.

� Locational decisions should have regard to the proximity of labour supply and the potential to contribute to, and benefit from, agglomeration effects due to closeness of other businesses and infrastructure.

4. Regional action and policy will seek to maximise the opportunities presented by a network of majorsettlements.

� Develop a clear vision and role for all parts of the regional urban and rural network, by framing regeneration activity withinmasterplans which reflect the views of all stakeholders as well as community aspirations.

5. Development will support and promote the diversification of rural areas. � With a particular focus on supporting the most deprived rural districts and market towns. Development proposals in rural

areas should make a positive contribution to supporting local business, extending employment opportunities, providingaffordable housing and enhancing service provision.

6. Improving the built environment through high standards of design.� Using sustainable construction techniques and high standards of design in all development including investment in the

public realm to act as a catalyst for private sector investment.

7. Support and develop increased social cohesion and capture community benefit.� To support initiatives which help to build social cohesion within the region's communities, particularly projects which make

a demonstrable impact on reducing high levels of deprivation and developing the social economy.� To explore ways of unlocking land values for community benefit and ensuring that public investment acts as a catalyst for

private sector investment and involvement.

8. Consider the needs for all types of infrastructure and utility connectivity. � To ensure that a high level of connectivity is provided for the full range of utilities, including an appropriate level of information

and communications technology (ICT), which will support both existing and future business development needs. � To promote opportunities for the provision, retention and enhancement of green infrastructure in both urban and rural areas

so as to encourage more sustainable living patterns.

Annex B

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Annex B

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PICTURED: EAGLE CENTRE DEVELOPMENT BY WESTFIELD IN DERBY.

Annex C:Under-represented groups

Black and minority ethnic

According to the 2001 Census, about 9% of the region's population classify themselves as coming from an ethnic minority

background. Ethnic minority groups generally have lower levels of employment. For example, in 2004, the employment rate for

those of Pakistani or Bangladeshi origin in the East Midlands was only 43.8% of the working age population, over 30 percent below

the regional average.149 Although there have been significant improvements in the employment rates of ethnic minority groups in

recent years and there is significant variation between different groups,150 this gap in employment rates has been consistent over

the past 20 years.

Disabled people

There are nearly 10 million people in the UK with disabilities. Many disabled people lack the skills required to compete equitably in

the jobs market because they have been denied the opportunity to acquire them. There is also evidence to suggest that those with

disabilities encounter more barriers to accessing training and learning: only 14% of those with disabilities in the region participate

in training, compared to 42% without disabilities.151 The employment rate among those with disabilities in the East Midlands was

less than half that of those without disabilities in 2004.152 Additionally, those on Incapacity Benefit make up the largest proportion of

the 'hidden unemployed'. This describes people who are out of work, who might reasonably be expected to find work in a fully

employed economy, but have been diverted onto benefits that have removed them from the claimant count of Jobseekers'

Allowance. These are people with genuine health problems, often related to the industry they had previously worked in (such as

former colliery workers), that could be expected to find work suiting their abilities in a more fully employed economy The 'hidden

unemployed' tend to be concentrated in areas which already exhibit high levels of claimant count unemployment, such as the

former coalfields in the Northern sub-area.153 Assisting such individuals back into work, and supporting them into sustained and

quality employment, is the primary aim of the Government's Pathways to Work Pilots.

Older workers

Older workers are significantly more likely to have few or no qualifications. The proportion of the economically active population

aged between 50 and retirement age with no qualifications is almost double the average for all working age.154 Although

employment rates for older people have been increasing, the implications for skill requirements of continued industrial and

technological change, along with the changing demographic structure of the region, means that this group will require particular

support to sustain and increase labour market participation.

Women

Much of the growth in employment across the UK can be attributed to a dramatic increase in the number of women joining the

labour market. Women currently make up nearly half the country's workforce and the proportion is growing. In the East Midlands in

1999, women made up 45% of the workforce, which was slightly below the national average. By 2002, this share had grown to 48%,

which is higher than the national average. Women in the East Midlands are forecast to continue to account for a larger share of the

Annex C

180

workforce than nationally over the next decade.155 However, despite nearly 30 years of gender equality legislation, women still earn

less than men. Increasing numbers of people are working flexibly and this growth, largely driven by women, should be an asset as

we move towards a 24/7 economy. Women could be Britain's competitive edge.156 However:

� A persistent pay gap exists. Women in the East Midlands are paid an average of 46% a year less than men, or £10,078 less. This gap is higher in the region than in the UK, where women are paid £9,876 less each year- a 43% difference.157

� The economic activity rate for women is lower than that of men (72% compared to 82%).� The employment rate for women is, at around 71%, nine percentage points lower than the male employment rate.158

� Women are half as likely to be involved in entrepreneurship as men. In the East Midlands 4.3% of women were actively involvedin creating or running a new business in 2004, compared to 9% of men.

Migrant workers

Research suggests that migrants account for about 10% of the working age population in the UK. The migrant population is

extremely diverse, encompassing skilled and unskilled migrants from both EU and non EU countries, and transient seasonal

workers, refugees and asylum seekers. There is evidence to suggest that economic

migration yields substantial benefits to the economy. Migrant labour addresses

shortages at either extreme of the labour market. Skilled migrants fill vacancies for

doctors, teachers and other professional occupations, whilst lower skilled economic

migrants play an important role in addressing shortages in unskilled, temporary, and

casual employment in the agriculture and hospitality sectors, especially in South

Lincolnshire. Research indicates that key problems faced by employers in employing

migrants include problems in gaining work documentation; lack of willingness to deal

with legal requirements; a negative public image of refugees; and a lack of familiarity

and comparability of qualifications and work experience.159

Employability and worklessness

Addressing employability and worklessness involves tackling a range of factors affecting individuals and their inclusion. It is widely

recognised that improved access to quality, affordable and flexible childcare and dependant care, can provide individuals with

greater opportunities to access the labour market. However, an increasing challenge will be posed by the region's ageing

population. This will lead to an increased number of people caring for elderly relatives, an issue which regional partners will need

to address. This is an important consideration in ensuring diversity and inclusion in the labour market, as evidence suggests that

care responsibilities affect disproportionately more women than men.160 Physical access to services and opportunities is an issue

in rural areas. Another key factor is providing accessibility to better quality information, advice and guidance about learning and

work, particularly for the low skilled who may require more intensive support.

Ensuring local communities have easy access to a range of services appropriate to their needs and are supported to find work

locally, will reduce their vulnerability in the labour market and provide opportunities to enhance their employability. Employers will

benefit from having access to a wider pool of labour to recruit from, whilst training that is accessible to local people will help to

address poor skills as a barrier to sustained and high quality employment within local communities.

Further details

For a detailed picture of the demography of the East Midlands see Chapter 1 of the 'RES Evidence Base: The East Midlands in

2006'. This is available to download from - www.emintelligence.com

Annex C

There is evidenceto suggest thateconomicmigration yieldssubstantial benefitsto the economy.

181

Annex D:Links to other regionalstrategiesIn the guidance to RDAs on Regional Economic Strategies (RESs), the Secretary of State for Trade and Industry emphasised the

need for RESs to have regard to other relevant regional strategies which will influence, and be influenced by it.

In the East Midlands the Regional Economic Strategy is one of a suite of regional strategies which will address key development

issues under the overall umbrella of the East Midlands Integrated Regional Strategy (IRS). A summary of these strategies is

presented at the end of this section.

Links between the Regional Economic Strategy and the RegionalSpatial Strategy

The Integrated Regional Strategy represents the overarching strategy with the Regional Spatial Strategy (RSS) elaborating thespatial theme and the RES developing the economic development priorities.

Joint working between emda, the East Midlands Regional Assembly (EMRA) and the Government Office for the East Midlands hasresulted in closely aligned strategies which take account of and reflect regional priorities. The process to develop regional fundingprioritisation for transport, housing and economic development has also further enhanced this relationship.

The Regional Economic Strategy (RES) and the Regional Spatial Strategy (RSS) are mutually supportive and reinforcing. They jointlyprovide the context for securing sustainable economic development across the East Midlands. The aim is to ensure a positivesustainable contribution to economic growth when taking forward options for development, whether in an urban or rural context.The strategies are underpinned by a set of common assumptions about economic growth and change based on economicforecasts developed by emda. This is in accordance with the ODPM Guide ‘Improving the Economic Evidence Base supportingRegional Economic and Spatial Strategies’ published in September 2005.

Key principles which underpin both strategies include the following:

The practice and pursuit of sustainable development.� The RES seeks to achieve economic growth but not at any cost by having regard for the social and environmental

consequences of economic growth. Both strategies have also been subject to an independent Sustainability Appraisalduring their preparation as part of an iterative process which has fed policy development.

A shared understanding of the geography of the East Midlands.� Although the vehicle for the expression of spatial policy is the RSS it is nevertheless recognised that other strategies, notably

the RES are not 'spatially neutral' - the effect of the implementation of its priorities will be felt across the region and there willbe clear differential spatial impacts and effects. It was important therefore that the RSS and the RES agreed to define theregion in terms of a shared understanding of functional sub-regions each with different characteristics and challenges.

The need to develop a competitive economy.� Both strategies recognise that the East Midlands’ region needs to compete in a global market place, and should aim to

increase productivity through innovative and knowledge focused businesses, drawing on an efficient workforce with highlevels of innovation, enterprise and skills. Specifically, both strategies recognise the importance of ensuring a good supplyof high quality land and premises to support economic activity, particularly in priority sectors.

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182

Harnessing the growth potential of the major cities and towns as economic drivers.� Both strategies seek to help cities drive forward regional and sub-regional economies. Clear and cohesive visions are

promoted based on masterplans and joint working to secure agreed regeneration priorities. More detailed guidance onpolicy priorities for urban areas is provided in the Urban Action Plan which was prepared by a multi-agency UrbanPartnership Group. This includes the need to bring back previously used land into productive use.

Addressing the specific needs of rural areas.� The specific needs of rural areas where the sparsity of population, the need for rural diversification, the limited employment

opportunities and lack of affordable housing and service provision combine to pose particular difficulties which require atargeted approach with a focus upon the most deprived rural areas and an emphasis upon the role of market towns asservice providers.

The creation of sustainable communities that embody sustainable development principles and help to

promote social inclusion.� Areas of prosperity and deprivation often coexist in close proximity. Ensuring that development opportunities reach those in

most need is an agreed priority.

The promotion of environmental quality in urban and rural areas to make them attractive places to live,

work and invest in.� This includes the need to minimise the impact of development upon climate change and the promotion of sustainable

patterns of development that make efficient use of land, resources and infrastructure. Both strategies recognise that theregion's environment is an important asset.

The need to improve the infrastructure of the region so as to improve accessibility to jobs, homes and services.� There is agreement that the nature of transport problems cannot be solved simply by building new roads. However, reducing

the need to travel, green travel plans and an emphasis on public transport are all key ingredients of a successful transportpolicy. Both regional organisations (emda and EMRA) are committed to working jointly to secure a process for regionalprioritisation of transport schemes.

Active stakeholder involvement and community participation.� During the preparation of both strategies there has been significant involvement of stakeholders and other partners. Both

emda and EMRA have also actively sought the involvement of 'hard to reach groups' in helping to shape policy.

A framework for implementation and monitoring.� Both strategies have placed a high priority upon implementation and monitoring, to ensure that their effectiveness can be

monitored. In the case of the RES the comprehensive Evidence Base which was used to inform the development of theStrategy will be kept up to date to assess the effect of RES implementation.

Annex D

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Annex D

184

Regional Lead Key PointsStrategy Organisation

Regional Housing Regional Housing The strategy's overall objective is: ‘to ensure that the existing and futureStrategy Board (RHB) housing stock is appropriate to meet the housing needs of all parts of the

community’.It has four key aims:� Deliver the Sustainable Communities Plan� Encourage Regional Integration� Provide Guidance to Stakeholders� Inform the Regional Housing Investment StrategyFor more information visit:www.goem.gov.uk/goem/psc/housing/?a=42496

Investment for East Midlands Identifies the most important public health issues for the region, and createdHealth Regional Assembly a public health agenda for the IRS. Outlines 5 public health priorities which

(EMRA) could provide a rapid dividend at regional level and add value to the work oflocal partnerships. Creates a framework of 16 objectives with identifiedLead Agencies.For more information visit: www.investmentforhealth.org.uk/report/index.asp

Destination East East Midlands The Regional Tourism Strategy recognises the value of investing in our keyMidlands The East Tourism regional assets, including world-class brands such as Robin Hood andMidlands Tourism Sherwood Forest, the Peak District, the National Forest and Silverstone, asStrategy 2003-2010 well as emerging strengths such as sports and cultural tourism.

www.emda.org.uk/uploaddocuments/emTourismStrategyFull.pdf

The Place of Choice Culture East Midlands The region’s cultural strategy, seeks to improve the region’s quality of life The Regional by offering a blue print for the cultural development of the EastCultural Strategy Midlands. www.culture-em.org.uk

Change 4 Sport Sport England This is the plan for sport in the East Midlands. It is the region's response toEast Midlands the national government strategy for sport, "Game Plan", and the Framework

for Sport led by Sport England. www.sportengland.org/c4s.pdf

Regional EMRA Part of the IRS Framework, sitting beside the RSS and the Regional EconomicEnvironment Strategy. Considers the impact of our activities on the environment, setsStrategy objectives and policies and actions which are being tackled at the regional

level, with targets and indicators to help us measure our progress. www.emra.gov.uk/publications/environment.asp

Regional Energy EMRA Provides the policy framework for developing an action plan to guideStrategy decisions on the generation, supply and use of energy across the region and

makes the connections between energy and other key policy areas, inparticular in relation to spatial planning, waste, the economy and transport,but also food and farming and housing.For further information visit: www.emra.gov.uk/e4e/publications/policy.asp

Putting Wildlife Regional Biodiversity The aim is to promote the strategic framework within which conservation andback on the map Forum enhancement of biodiversity can best be achieved for the region as part of(draft) the IRS framework.

Summary of other regional strategies

The following regional strategies all form part of and contribute towards the IRS Framework.

Annex D

185

Regional Lead Key PointsStrategy Organisation

Regional Spatial EMRA The aim is to realise the IRS's vision of sustainable development within theStrategy (RSS8) context of a spatial plan. The RSS or Regional Plan contains 10 core

objectives and policies covering 5 identified sub-areas and topic basedregional priorities covering housing, the economy and regeneration, naturaland cultural assets and transport (as the Regional Transport Strategy). For further information visit: www.emra.gov.uk/regionalplan

Milton Keynes and Government / EMRA The MKSM Sub-Regional Strategy is an integral part of the RSS (SeeSouth Midlands previous) and seeks to promote growth in the south of the region in a way thatSub-Regional is consistent with the principles of sustainable development.Strategy For further information visit: www.emra.gov.uk/regionalplan

Regional Transport EMRA The RTS is an integral part of the RSS and contains 6 Regional Objectives, aStrategy series of sub-area Objectives, along with priorities for investment. It is based

on reducing the need to travel, promoting public transport, making better useof existing infrastructure and only then developing additional highway capacity. For further information visit: www.emra.gov.uk/regionalplan

Regional Waste EMRA The RWS falls within the RSS. It provides the strategic framework for wasteStrategy management at the Regional level in order to ensure that the East Midlands

moves towards waste minimisation, efficient resource use and sustainablewaste management practice in future.For further information visit: www.emra.gov.uk/waste

Regional Freight EMRA The RFS falls within the RSS. It seeks to create a framework which helpsStrategy industry and society to develop a more efficient and sustainable distribution sector.

For further information visit: www.emra.gov.uk/freight

Regional Rural EMRAF The RRDF sets the framework for delivery across all IRS themes andDelivery Framework strategies as they impact on rural areas and their distinctive needs and(RRDF) issues. This is a requirement of DEFRA's Rural Strategy 2004.

PICTURED: VENTILATION SOLUTIONS LTD, NOTTINGHAM.

GlossaryBiodiversityLiterally means 'the variety of life', and includes all the different plant, animal, fungus and micro-organism species worldwide, thegenes they contain, and the ecosystems of which they form a part.

Brownfield land'Brownfield' is a term generally used to describe previously developed land, which may or may not be contaminated.

Comparative advantageCountries and regions differ in the amount and types of resources that they have, meaning that they have differing strengths. Thisis comparative advantage.

ExternalitiesThe economic activities of one person or business can impact upon the activities of others. These spillover effects are known asexternalities and can be positive or negative.

Greenfield landLand on the edge of a town or city, or away from larger urban areas. It is land that is undeveloped, but has development proposedfor it.

Gross Domestic Product (GDP)A commonly-used measure of output in national economies. It can be calculated in three ways: as the sum of all incomes, allexpenditures, or all production.

Gross Value Added (GVA)Gross value added is the recognised measure of economic output used at regional level. It is a measure of output at basic prices,whereas GDP is a measure of output at market prices. The difference between the two is down to the treatment of taxes andsubsidies. GDP is equal to GVA plus taxes minus subsidies.

Market failureMarket failure occurs when the conditions required for the achievement of the market efficient solution fail to exist or arecontravened in some way.

Milton Keynes South Midlands (MKSM)The Government has designated the Milton Keynes South Midlands (MKSM) sub-region as a major growth area over the next 25years. The MKSM Growth Area comprises areas around the towns of Luton, Dunstable, Aylesbury, Bedford, Milton Keynes,Northampton, Wellingborough, Kettering and Corby.

Public Service Agreements (PSAs)Public Service Agreements set out the key improvements that the public can expect from government expenditure. They are threeyear agreements, negotiated between each of the main government departments and HM Treasury during the Spending Reviewprocess. Each PSA sets out a department's high-level aim, priority objectives and key performance targets.

Strategic Environmental Assessment (SEA)Strategic Environmental Assessment is a process to ensure that significant environmental effects arising from policies, plans andprogrammes are identified, assessed, mitigated, communicated to decision makers, monitored, and that opportunities for publicinvolvement are provided. The SEA Regulations require that Statutory Consultation Bodies be consulted. These are the CountrysideAgency, English Heritage, English Nature and the Environment Agency

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References1 Professor David Greenaway and Professor Chris Milner, Leverhulme Centre for Research on Globalisation and Economic Policy,University of Nottingham, on behalf of emda, 'Globalisation and the Rise of China and India: Challenges and Opportunities for theEast Midlands', November 2005.2 East Midlands Regional Assembly, 'Regional Spatial Strategy for the East Midlands', March 2005.3 ONS Crown Copyright, 'Key Statistics for rural and urban area classification', March 2005, published in: emda, 'RES EvidenceBase: the East Midlands in 2006- Section 1:The Demography of the East Midlands', 2006.4 The IMD 2004 is constructed using seven domains: income; employment; health and disability; education, skills and training;barriers to housing and services; the living environment; and crime. These domains are a combination of individual indicators. Thedomains have been weighted to reflect current understanding of the contribution each makes to overall levels of deprivation.Consequently income and employment deprivation are weighted more heavily than environmental deprivation or crime.5 ONS Crown Copyright, 'Region in Figures - East Midlands: Winter 2004/05' December 2004.6 Countryside Agency, 'East Midlands State of the Countryside Report', April 2005.7 ONS Crown Copyright, 'Key Statistics for rural and urban area classification', March 2005, published in: emda, 'RES EvidenceBase: The East Midlands in 2006- Section 1:The Demography of the East Midlands', 2006.8 ONS Crown Copyright, '2001 Census', published in: emda, 'RES Evidence Base: The East Midlands in 2006- Section 1: theDemography of the East Midlands', 2006.9 The 2004 Annual Population Survey shows that differences in employment rates between different ethnic minority groups are large.For those of Indian origin, for instance, the employment rate is considerably higher, at 65.9% of the working age population,although this is still almost 10 percentage points below the regional average.10 The five northern and midlands regions in England are: the East Midlands, the Midlands, Yorkshire and the Humber, the NorthWest, and the North East.11 ONS Crown Copyright, 'Annual Population Survey', January 2004-December 2005, published in: emda, 'RES Evidence Base: TheEast Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.12 ONS Crown Copyright, 'Annual Survey of Hours and Earnings' (Workplace based)', 2005 Gross Annual Pay, November 2005,published in: emda, 'RES Evidence Base: The East Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.13 Case studies undertaken on behalf of the Department for Trade and Industry suggest that businesses that compete on the basisof the sophistication of their produce, rather than cost, put a greater prominence on workforce skills. Discussed in: Institute ofEmployment Research, DTI Skills Research Programme, University of Warwick, 'Tackling the Low Skills Equilibrium', November 2003.14 ONS Crown Copyright, 'Annual Population Survey', January 2004-December 2005, published in: emda, 'RES Evidence Base: TheEast Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.15 Office for the Deputy Prime Minister, 'Indices of Multiple Deprivation 2004', April 2004, published in: emda, 'RES Evidence Base:The East Midlands in 2006- Section 5: Deprivation and Economic Inclusion in the East Midlands', 2006.16 English Nature and Environment Agency, data contributions published in: emda, 'RES Evidence Base: The East Midlands in 2006-Section 7: The East Midlands Environment', 2006.17 Gross value added is the recognised measure of economic output used at regional level. It is a measure of output at basic prices,whereas GDP is a measure of output at market prices. The difference between the two is down to the treatment of taxes andsubsidies: GDP = GVA + taxes - subsidies. It is not possible to reliably measure taxation and subsidies at regional level which iswhy GVA is used.18 Commentary of OECD, ONS and Experian data published in: emda, 'RES Evidence Base: The East Midlands in 2006- Section 3:Economy and Productivity', 2006.19 Home Office, 'Improving Opportunity, Strengthening Society: the Government's strategy to increase race quality and communitycohesion', 2005.20 emda / Experian Scenario Impact Model, August 2005, published in: emda, 'RES Evidence Base: The East Midlands in 2006-Section 3: Economy and Productivity', 2006.21 See footnote 16.22 Department for Trade & Industry, 'Regional Competitiveness and State of the Regions', May 2005, published in: emda, 'RESEvidence Base: The East Midlands in 2006- Section 3: Economy and Productivity', 2006.23 Ibid - endnote 22.24 University of Leicester, University of Loughborough, University of Nottingham, De Montfort University, Nottingham Trent University,Derby University, Lincoln University, The University of Northampton, Bishop Grosseteste College, and the Open University East Midlands.25 A fuller discussion of the role and significance of the higher education institutions to the regional economy is in: emda, 'RESEvidence Base: The East Midlands in 2006- Section 3: Economy and Productivity' [under development].26 Department for Trade & Industry, 'Regional Competitiveness and State of the Regions', May 2005, published in: emda, 'RESEvidence Base: The East Midlands in 2006- Section 3: Economy and Productivity', 2006.27 Total Entrepreneurial Activity is a measure of enterprise defined as "Any attempt at a new business or new venture creation, suchas self employment, a new business organisation, or the expansion of an existing business."28 Department for Trade & Industry, 'Regional Competitiveness and State of the Regions', May 2005, published in: emda, 'RESEvidence Base: The East Midlands in 2006- Section 3: Economy and Productivity', 2006.29 Ibid - endnote 28.

References

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30 Professor Ron Martin, University of Cambridge, on behalf of emda, 'Thinking about Regional Competitiveness: Critical Issues',September 2005.31 Department for Trade & Industry, 'Regional Competitiveness and State of the Regions', May 2005, published in: emda, 'RESEvidence Base: The East Midlands in 2006- Section 3: Economy and Productivity', 2006.32 See emda, 'RES Evidence Base: the East Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.33 HM Government, 'The UK Sustainable Development strategy, Securing the Future', March 2005.34 The precautionary principle should be applied when there is good reason to believe that harmful effects may occur and thelevel of scientific uncertainty about the consequences or likelihoods is such that the risk cannot be confidently assessed.It does not therefore preclude activities just because there is some risk associated with them. 35 East Midlands Regional Assembly, 'East Midlands Integrated Regional Strategy', January 2005.36 A more detailed description of the RES Performance Management Framework is available in a technical paper from:www.emintelligence.com37 For a detailed discussion on trends in regional employment and unemployment, see: emda, 'RES Evidence Base: the EastMidlands in 2006- Section 4: The East Midlands Labour Market', 2006.38 For a detailed discussion on regional and sub-regional productivity, see: emda, 'RES Evidence Base : The East Midlands in 2006-Section 3: Economy and Productivity', 2006.39 For a detailed discussion of characteristics related to the 'low pay low skill equilibrium', see: emda, 'RES Evidence Base: the EastMidlands in 2006- Section 4: The East Midlands Labour Market', 2006.40 ONS Crown Copyright, 'Annual Population Survey', January 2004-December 2004, published in: emda, 'RES Evidence Base: theEast Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.41 Professor Keith Sisson, Emeritus Professor of Industrial Relations, Warwick Business School, on behalf of emda, 'Improving workorganisation, the case for a regional action programme', May 2005.42 IFF Research, 'National Employer Skills Survey 2003: A Report of Findings for the East Midlands Region', June 2004, publishedin: emda, 'RES Evidence Base: the East Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.43 To inform the development of the employment, skills and productivity partnership emda carried out an analysis Labour ForceSurvey data using a method proposed by the European Union to measure the 'knowledge intensity of employment' detailed in'Employment in the Knowledge Based Economy', in European Commission, 'Employment in Europe' 2000. 44 Nottinghamshire Research Observatory, on behalf of emda, 'Analysis of Qualifications in the East Midlands Life and Work Survey2003', August 2004, published in: emda, 'RES Evidence Base: the East Midlands in 2006- Section 4: The East Midlands LabourMarket', 2006.45 Institute of Employment Studies, University of Sussex, on behalf of emda, 'Graduate Employment Choices in the East Midlands', 2004.46 Professor Keith Sisson, Emeritus Professor of Industrial Relations, Warwick Business School, on behalf of emda, 'Improving workorganisation, the case for a regional action programme', May 2005.47 Ibid - endnote 46.48 IFF Research, 'National Employer Skills Survey 2003: A Report of Findings for the East Midlands Region', June 2004, publishedin: emda, 'RES Evidence Base: the East Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.49 Department for Education and Skills, 'Foster Review of Further Education', June 2005.50 Lifelong Learning UK, 'Further Education Workforce Data for England: An Analysis of Staff Individualised Records for 2003/2004', 2005.51 A list of HEIs is provided at endnote 24.52 The impact on the regional economy of the East Midlands' Higher Education Institutions, 2003.53 'Skills in the UK: The long term challenge', Leitch Review of Skills, December 2005.54 Institute of Employment Studies, University of Sussex, on behalf of emda, 'Graduate Employment Choices in the East Midlands', 2004.55 Professor Andrew Atherton and Kirk Frith, Enterprise Research and Development Unit, University of Lincoln, on behalf of emda,'Creating an Entrepreneurial Region: Exploring the Entrepreneurial Capacity of the East Midlands', 2005.56 London Business School, 'Global Entrepreneurship Monitor: East Midlands 2004', January 2005.57 London Business School, 'Global Entrepreneurship Monitor: East Midlands 2004', January 2005.58 Small Business Services, 'A Government Action Plan for Small Businesses: The Evidence Base', 2005.59 Professor Andrew Atherton and Kirk Frith, Enterprise Research and Development Unit, University of Lincoln, on behalf of emda,'Creating an Entrepreneurial Region: Exploring the Entrepreneurial Capacity of the East Midlands', 2005.60 SBS, 'VAT Registrations and De-Registrations, 2003', November 2004, published in: emda, 'RES Evidence Base: The EastMidlands in 2006- Section 3: Economy and Productivity', 2006.61 Professor Andrew Atherton and Kirk Frith, Enterprise Research and Development Unit, University of Lincoln, on behalf of emda,'Creating an Entrepreneurial Region: Exploring the Entrepreneurial Capacity of the East Midlands', 2005.62 Professor Sara Carter, Department of Management and Organisation, University of Stirling, on behalf of emda, 'Women'sEnterprise and Business Support in the East Midlands', September 2005.63 SBS, 'VAT Registrations and De-Registrations, 2003', November 2004, published in emda, 'RES Evidence Base: The EastMidlands in 2006- Section 3: Economy and Productivity', 2006.64 London Business School, 'Global Entrepreneurship Monitor: East Midlands 2004', January 2005.65 Professor Andrew Atherton and Kirk Frith, Enterprise Research and Development Unit, University of Lincoln, on behalf of emda,'Creating an Entrepreneurial Region: Exploring the Entrepreneurial Capacity of the East Midlands', 2005.66 It can be argued that enterprise education would have positive spillovers for other people and other elements in an individual'slife, such as improving their future employability.67 Transport Equipment alone is 46% of exports - Sector Evidence Paper.68 Section 3 Chart 12 RES evidence base.69 RES evidence base Section 3 Chart 5.

References

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70 HM Treasury, 'Bridging the Finance Gap', 2003, and, Small Business Service 'Improving Access to Finance for Small Business', 2003.71 Small Business Service, 'A Mapping Study of venture Capital provision in SMEs in England', 2005.72 Business Link, 'The Advice Dividend', 2002.73 Glyn Owen, on behalf of emda, 'Change in the Countryside: raising economic wellbeing through targeted intervention', October 2005.74 Ibid - endnote 73.75 East Midlands Tourism, 'Corporate Plan, 2005-2008', February 2005.76 Ibid - endnote 75.77 HM Treasury, ‘The Cox Review: Enhancing the Role of Creativity in Driving the Productivity Performance of SMEs in the UK’, 200578 HM Treasury and ONS, 'Public Expenditure Statistical Analyses 2005', April 2005.79 Sport England, ‘Audit and Research of Performance Sport in the East Midlands’, May 2005.80 The region's performance in measures of innovation is discussed in detail in: emda, 'RES Evidence Base: The East Midlands in2006- Section 3: Economy and Productivity', 2006.81 Department for Trade & Industry, 'R&D Scoreboard 2005', 2005.82 Department for Trade & Industry, 'Regional Competitiveness and State of the Regions', May 2005, published in: emda, 'RESEvidence Base: The East Midlands in 2006- Section 3: Economy and Productivity', 2006.83 Higher Education and Research Opportunities, '2001 Research Assessment Exercise', 2001.84 i2010, 'A European Information Society for Growth and Employment', MEMO/05/184, June 2005.85 European Commission Enterprise & Industry Directorate General, 'A Pocketbook of e-business indicators', 2005.86 Department of Trade and Industry, i2010, 'Responding to the Challenge', September 2005.87 Market Research UK, on behalf of emda, 'The Challenge of E-Adoption in the East Midlands', 2005.88 Network of European Environmental Protection Agencies, 'Contribution of Good Environmental Regulations to Competitiveness',November 2005.89 Earth Science (also known as geoscience, the geosciences or the Earth Sciences), is an all-embracing term for the sciencesrelated to the about the origin, evolution, and future of the natural world.90 OECD, 'Science and Technology Statistics', 2004.91 The O2C Arc is dedicated to improving the economic wealth within its geographical area and, through this, the UK GDP. It willachieve this by developing the Arc area and modifying perceptions of it such that it becomes widely regarded as: 'The largest andmost successful knowledge-based economy in Europe with realistic ambitions to become the world leader.' 92 Ibid - endnote 91.93 Adaptive capacity is the capacity of the East Midlands to respond to external shocks and to create new paths of developmentfrom within. Adaptive capacity enables a region to avoid getting locked into a path of long-term economic decline. For more on thisconcept see R Martin, University of Cambridge, on behalf of emda, 'Thinking About Competitiveness: Critical Issues', October 200594 Professor Christine Oughton and Marion Frenz, Birkbeck, University of London, on behalf of emda, 'Innovation Policy PositionPaper: A report for the East Midlands Development Agency', October 2005.95 A detailed description of the sector selection criteria, along with profiles of the key sectors, can be found in the Economy &Productivity of The East Midlands 2006 report.96 Bell Hanson Ltd, on behalf of emda, 'Broadband in the East Midlands', 2004.97 Professor Ron Martin, University of Cambridge, on behalf of emda, 'Thinking about Regional Competitiveness: Critical Issues',September 2005.98 Recent data has shown an increase in public transport patronage in the East Midlands. For further information, see: emda, 'RESEvidence Base: The East Midlands in 2006- Section 6: Transport, Infrastructure and Housing', 2006.99 Government Office for the East Midlands, emda, and the East Midlands Regional Assembly, 'Regional Funding Allocations Adviceto Ministers', January 2006.100 J Simmie, Oxford Brookes University, 'Trading Places: Competitive Cities in the Global Economy', 2000.101 Oxford Economics, 'Express Freight', 2005.102 David King, UK Government's Chief Scientist, 2003. 103 The National Academies, ‘Joint science academie's statement: Global response to climate change’, 2005.104 Intergovernmental Panel on Climate Change (IPCC), ‘Third Assessment Report’, 2001.105 Association of British Insurers, ‘Financial Risks of Climate Change’, 2005.106 UK Climate Impacts Programme, ‘Climate Change Scenarios for the UK Climate Impacts Programme’, 2002.107 The Rt Hon Patricia Hewitt, ‘Profiting from the low carbon economy’: IPPR conference, December 2001, London.108 Regional Waste Strategy, East Midlands Regional Assembly, 2005.109 ODPM, 'Securing the Future: UK Sustainable Development Strategy', 2005.110 East Midlands Regional Assembly, 'East Midlands Green Infrastructure Scoping Study', September 2005.111 ODPM, 'Securing the Future: UK Sustainable Development Strategy', 2005.112 Roger Tym and Partners, on behalf of emda, 'Quality of Employment Land Study', 2001, and, Innes England and Sinclair KnightMerz, on behalf of emda, 'Regional Employment Land Priorities Study', 2003.113 For a discussion of the industrial structure of the East Midlands, see: emda, 'RES Evidence Base: The East Midlands in 2006-Section 3: Economy and Productivity', 2006.114 Glyn Owen, on behalf of emda, 'Change in the Countryside: raising economic wellbeing through targeted intervention', October 2005.115 ODPM, 'National Land Use Database: Previously developed land that may be available for development', March 2004.116 DTZ Pieda, on behalf of the East Midlands Regional Assembly, 'Regional Spatial Strategy: Annual Monitoring Report', February 2005.117 Professor Ron Martin, University of Cambridge, on behalf of emda, 'Thinking about Regional Competitiveness: Critical Issues',September 2005.118 Ibid - endnote 117.

References

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119 The Leitch Review of Skills, 'Skills in the UK: The long-term challenge - Interim Report', December 2005.120 ODPM, 'Indices of Multiple Deprivation (IMD 04)', 2004.121 Community Cohesion- an action guide, LGA, Home Office, ODPM, et al, 2004, p7.122 ibid - endnote 121.123 Improving Opportunity: Improving Society, Home Office, p19.124 There are numerous definitions, sharing similar characteristics. See: Social Capital: Discussion Paper, Performance andInnovation Unit, 2002; Regional Social Capital in Europe, European Foundation for the Improvement of Living and WorkingConditions, 2005; Social Capital and Economic Development in the North East of England, Durham University et al, 2005.125 East Midlands Regional Assembly, 'East Midlands Integrated Regional Strategy', 2005.126 The place of Social Capital in understanding social and economic outcomes is discussed in: Michael Woolcock, 'CanadianJournal of Policy Research', 2001.127 Professor Ron Martin, University of Cambridge, on behalf of emda, 'Thinking about Regional Competitiveness: Critical Issues',September 2005.128 Audit Commission, 'Competitive Procurement', 2002.129 ODPM, 'National Neighbourhood Renewal Strategy', 2000.130 Social Exclusion Unit, Department for Education and Employment (now DfES), 'Jobs for All: Policy Action Team 1 Report', 1999131 ONS Crown Copyright, 'Local Area Labour Force Survey', March 2003 to February 2004, published in: emda, 'RES EvidenceBase: The East Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.132 Ibid - endnote 131.133 The Leitch Review of Skills, 'Skills in the UK: The long-term challenge- Interim Report', December 2005.134 Department of Work and Pensions, 'Statement of strategic priorities for Regional Economic Strategies', 2005.135 Department for Trade and Industry, 'Workplace Employment Relations Survey', 2004.136 Health and Safety Commission, 'Statistics of Occupational Safety, Ill Health and Enforcement Action - East Midlands 2004/2005', 2005.137 National Centre for Social Research, on behalf of the Department of Health, 'Health Survey for England', 1994-2002, February 2004.138 European Commission, 'Green Paper: Entrepreneurship in Europe', 2003.139 Ibid - endnote 138.140 European Commission, Directorate-General for Enterprise, 'Helping the transfer of businesses: A 'good practice guide' ofmeasures for supporting the transfer of businesses to new ownership', July 2003.141 ONS Crown Copyright, '2003 Based Population Projections', 2005, published in: emda, 'RES Evidence Base: The East Midlandsin 2006- Section 1: The Demography of the East Midlands', 2006.142 Ibid - endnote 141.143 ONS Crown Copyright, 'Population Trends 105', 2001.144 London Business School, 'Global Entrepreneurship Monitor: East Midlands 2004', January 2005.145 DfES, 'Aiming High: Raising the Achievement of Minority Ethnic Pupils', 2003.146 ONS Crown Copyright, 'Mid Year Population Estimates’, 2004, published in: emda, 'RES Evidence Base: The East Midlands in2006- Section 1: The Demography of the East Midlands', 2006.147 London Business School, 'Global Entrepreneurship Monitor: East Midlands 2004', January 2005.148 Professor Steve Fothergill and Christina Beatty, on behalf of emda, 'Hidden Unemployment in the East Midlands', 2004.149 ONS Crown Copyright, 'Annual Population Survey', January 2004-December 2004, published in: emda, 'RES Evidence Base: TheEast Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.150 The 2004 Annual Population Survey shows that differences in employment rates between different ethnic minority groups arelarge. For those of Indian origin, for instance, the employment rate is considerably higher, at 65.9% of the working age population,although this is still almost 10 percentage points below the regional average.151 ONS Crown Copyright, 'Annual Population Survey', January 2004-December 2004, published in: emda, 'RES Evidence Base: TheEast Midlands in 2006- Section 5: Deprivation and Economic Inclusion in the East Midlands', 2006.152 Ibid - endnote 151.153 Ibid - endnote 151.154 ONS Crown Copyright, 'Local Area Labour Force Survey', March 2003-February 2004, published in: emda, 'RES Evidence Base:The East Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.155 Institute of Employment Research and Cambridge Econometrics, on behalf of the Sector Skills Development Agency, the Learningand Skills Council, and the DfES, 'Working Futures: New Projections of Occupational Employment, 2002-2012', December 2004.156 Department for Trade & Industry, 'Regional Competitiveness and State of the Regions', May 2005.157 ONS Crown Copyright, 'Annual Survey of Hours and Earnings 2004', April 2005, published in: emda, 'RES Evidence Base: TheEast Midlands in 2006- Section 4: The East Midlands Labour Market', 2006.158 ONS Crown Copyright, 'Annual Population Survey', January 2004-December 2004, published in: emda, 'RES Evidence Base: TheEast Midlands in 2006- Section 5: Deprivation and Economic Inclusion in the East Midlands', 2006.159 For further information on the migrant population in the East Midlands see: emda, ‘RES Evidence Base: The East Midlands in2006- Section 1: The Demography of the East Midlands', 2006.160 For further information, refer to a detailed analysis of a range of social surveys undertaken by the National Centre for SocialResearch in: emda, 'RES Evidence Base: The East Midlands in 2006- Section 5: Deprivation and Economic Inclusion in the EastMidlands', 2006.

References

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Index

191

agriculture 17, 20, 80, 143, 146airport development 91, 95, 97, 162

biodiversity 24, 105, 114business start-ups 27, 63-4, 145-7, 149

common barriers 137in deprived areas 130survival rates 64, 157targeted provision 157

business support inclusive 167innovation 64, 66, 157international trade 67, 69, 158key sectors 85new/growing SMEs 66-7, 137, 158public procurement 70resource efficiency 80, 160

businessesand deprived areas 130-1overcoming growth barriers 66-7research exploitation 75,-6, 80-1, 160schools/colleges engagement 55-6, 156skills demand 56, 59, 156-7

cities/major townsas economic drivers 20, 28, 53, 80, 89, 142

climate change 25, 35, 99-100, 106, 163communities 25, 37, 123-5, 166-7competition, international 17, 27, 50, 53, 63, 64, 67connectivity 88-9, 91, 92, 97, 128, 161-2crime 130, 167culture 28-9, 67, 70, 159

demographics 23, 28, 180-1deprivation 20, 24, 121, 123, 127, 147deprived areas

achieving local involvement 128, 130-1, 167reviving infrastructure/environments 128, 130, 167stimulating markets/enterprise 130-1, 168

development principles 178disability 23, 180disadvantaged 120

employability of 134, 136, 168, 180-1and entrepreneurship 137

diversityinclusion and market opportunities 17of workforce 134, 136, 169, 180-1

East Midlandskey challenges 27-9key characteristics 22

economic growthand the environment 105-6forecasts (2004-14) 25-6sustainable 35, 37, 105-6and transport 88, 91

economic inclusion 133-7, 168-9and enterprise 64, 133, 137, 169and housing 116

economic renewal 88-9, 109, 112, 127-31, 167-8low housing demand areas 116, 166transport role 88, 91

economic structurekey sectors 83, 85, 161under-invested sectors 64

education 23, 55international students 67, 69public expenditure 154qualification levels 134see also training; universities & higher education

employability 134, 136, 168-69, 181employment

and economic inclusion 133forecasts (2004-14) 25-6

employment rates 23-4, 26, 55, 120, 134, 145-6, 149,, 180-1energy and resources 99, 103, 163

increasing efficiency 25, 28, 79-80, 88, 160, 163low carbon technologies 28, 35, 99-100, 103, 163reducing demand 99-100, 163renewable energy 100, 163

enterprise 27, 53, 63-4, 157-9and economic inclusion 64, 133, 137, 169enterprise culture 63-4, 69, 157

environment 24, 37, 105-6, 109, 164infrastructures 105-6, 109, 130, 164

equality 17, 120-1, 134ethnicity 23, 180European funding 17

global economy 24-5, 75globalisation 17, 27

healthPublic Health issues 28and workforce 136, 169

higher education see universities & higher educationhousing 88, 116

improving range 116, 166infrastructure 116, 166and job markets 116

ICTbroadband access 79, 91and deprived areas 127, 133infrastructure 91, 97, 112, 114

income 23-4, 53, 145, 147, 149, 180and qualifications 23, 134wealth polarisation 123

Index of Sustainable Economic Wellbeing 38, 176-7industrial restructuring 83

Index

Index

192

infrastructureemployment-related 114, 165environmental 105-6, 164green 105, 109, 164housing growth 116, 166ICT 91, 97, 112, 114low carbon economy 103transport 88, 91-2, 95, 161-2utilities 112, 114, 116

innovation 26-7, 53, 66, 70, 75-81, 157, 159-61Integrated Regional Strategy (IRS) 19, 153, 182international trade 64, 67, 69, 95, 158investment 64

deprived areas 128, 130-1, 168new/growing businesses 66-7, 137, 158R&D/innovation 26-7, 53, 76

inward investment 26, 67, 69, 95, 112, 158

labour market 23-4'low-wage low-skill' jobs 23, 53, 55, 134migrant workers 143, 181under-represented groups 134, 180-1

land and development 111-7, 165-6greenfield vs brownfield 112, 114innovation facilities 81, 161previously developed 112, 114, 165restructuring of land 111-2supply issues 20, 112, 114, 165

Local Enterprise Growth Initiative (LEGI) 128

manufacturingcleaner production 106, 164diversification 64-6, 70, 80, 157importance of 64, 75, 111

migrant workers 20, 143, 181migration 23, 28Milton Keynes South Midlands (MKSM) 19-20, 81, 88,91, 112, 149

Northern Way, The 19, 153

older peopleageing population 20, 23, 28, 55, 134, 143, 181employment 134, 180lack of qualifications 55-6

Olympic & Paralympic Games (2012) 17, 70, 73, 159

population 23, 142-3, 145-7, 149productivity

factors influencing 26-7, 53and innovation 75, 79levels of 53, 59, 64

PSA targets 170-2public expenditure 154public procurement 70, 73, 130, 159

qualifications 23, 27, 55, 134

regeneration see economic renewalRegional Economic Strategy (RES)

indicative delivery plan 156-69key principles 182-3links to other strategies 152-3, 182-3strategic priorities 43-4

transformational actions 46-7structural themes 42-3

Regional Spatial Strategy (RSS)key principles 182-3links with RES 19, 111, 182

regional strategies: summary of 184-5research & development (R&D) 159

and businesses 26-7, 75-6and universities 26-7, 75-6

resource efficiency see energy & resourcesroad transport 92

travel demand management 97, 162rural areas 20, 23-4, 28, 53, 88, 91, 142rural development 17, 28

land/premises need 111, 114sustainability requirements 142

scientific excellence 159commercialising 80-1, 160'Science City' 75, 80-1, 160

skills 23, 27-8, 53, 70, 156-7adult workforce 156developing levels of 55-6, 134, 136, 156and economic inclusion 133matching to demand 59-60, 157stimulating business demand 56, 59, 156under-utilisation of 56, 59

Smart Growth: The Midlands Way (SGMW) 19, 153social capital 123, 125, 166social enterprises 123sport 28-9, 67, 70, 73sub-regional challenges

Eastern sub-area 142-3, 145Northern sub-area 145-6Peak sub-area 146-7Southern sub-area 149Three Cities sub-area 89, 142, 147

sustainable development 35, 37, 109challenge 88

technology 76, 79, 160tourism 20, 28, 69, 70, 73, 95, 109, 146, 158training

matching employer demand 59-60, 157public expenditure 154

transport 161-2accessibility 91, 97, 112, 161-2infrastructure 88, 91-2, 95, 97public transport 92, 95see also airport development; connectivity; road transport

unemployment see worklessnessuniversities & higher education 80

exploiting opportunity of 60R&D 26-7, 75-6, 100, 159

waste 79-80, 88, 103, 105, 160, 163women

as entrepreneurs 27, 64and labour market 28, 180-1

worklessness 55, 134, 136, 145, 147, 149, 168, 181

young people 134, 142

Index

Further information

Contact:

East Midlands Development AgencyApex CourtCity Link, NottinghamEast MidlandsNG2 4LA

Tel: 0115 988 8300Fax: 0115 853 3666Email: info@emd.org.ukwww.emda.org.uk

Information correct at time of going to print. Every effort has been made to credit contributors to this document.

Photography for ‘A flourishing region’ © copyright emda, by Green Imaging Ltd. www.greenimaging.co.uk

We would like to thank everyone who participated in the development of the Regional Economic Strategy.

This publication is printed on ERA Silk. Era is UK produced, comprising 50% de-inked post consumer waste collected from within 100miles of the mill, which lessens the impact on UK landfill. The balance is ECF pulp sourced from managed/certified forests.

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“By 2020, the

East Midlands will be

a flourishing region.

Increasingly

prosperous and

productive, we will

enjoy levels of

economic wellbeing

and a quality of life

higher than the

European average and

comparable with the

best in the world”